Many citizens can increase their future pension with voluntary contributions. Stiftung Warentest has determined which groups it is worthwhile for.
Anyone planning to increase their later pension with extra payments should implement the project in 2022. There is a simple reason for this: As a result of the Corona crisis, the so-called average wage has recently fallen. The additional pension that extra payers can get is based on this amount. The result: in 2022, extra payers will have to spend less money than in the previous year if they want to increase their pension.
In the current year, a so-called pension point costs 7235.59 euros. In 2021, the amount was still 7726.63 euros – almost 500 euros higher. There is a pension point for that. Since the pension increase on July 1, 2022, it has brought a whopping pension increase: Since then, the value of a pension point in the West has been EUR 36.02 (EUR 34.19 until June 30, 2022). In the east it is 35.52 euros (previously 33.47 euros). Citizens of the new federal states also have to spend less to acquire a pension point: in 2022 exactly 6943.94 euros.
In 2023, the price of a bond point is likely to rise again. Initial forecasts expect it to climb to over 8,000 euros – that would be an increase of a good ten percent compared to 2022. Anyone who has money available can purchase one or more pension points and thus achieve a respectable return. And beat inflation!
You can find the original article online at Stiftung Warentest.
Extra payments into the statutory pension not only increase later payments. In addition, many depositors can already take advantage of high tax benefits. This is especially true for the self-employed. But employees who are subject to social security contributions also benefit: Thanks to the tax breaks, the state often takes on around 30 percent of voluntary payments. If you spread your payments over five years, you can take full advantage of the tax benefits.
Anyone who collects a pension must also pay taxes to the tax authorities in retirement – if their retirement benefits exceed a certain amount. Those who want to deposit must have this in the back of their minds in their deliberations.
Here is an example calculation:
A self-employed person has to pay in exactly 8784 euros in 2022 to receive an extra monthly pension of 74.36 euros. If this extra pension is reduced by a flat rate of 40 percent for taxes and social security contributions, a net monthly payment of 44.62 euros remains. That is 535.44 euros per year. The calculation shows that the investment only pays off after 16.4 years – ie 16 years and almost five months. However, any pension increases are not taken into account. With them, the investment pays off much earlier.
Statistically, an extra payment would make sense: Men aged 65 currently have an additional life expectancy of 18 years, women even come to around 21 years. That means: On average, everyone survives the necessary 16 years.
Extra pension payments can be claimed as pension expenses in the tax return. The so-called outflow principle applies – the date on which the money flows is important: Anyone who transfers the annual contribution for 2021 in February 2022 may only claim it in the tax return for 2022.
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In the case of voluntary pension payments in particular, everyone must decide for themselves whether they want to take this step.
advantages
Disadvantages
Make additional deposits: Six tips
file application
Extra payments into the pension fund must be applied for. For this purpose, the German pension insurance offers various forms on the Internet:
deposit contributions
As a rule, the amounts flow monthly. Insured persons set the amount in advance: in 2022 they must amount to at least EUR 83.70 per month and a maximum of EUR 1311.30. The pension fund determines the maximum amount of the special contributions based on the application. After that, those willing to pay in have three months to transfer the amounts. It is also allowed to pay less.
Change contribution amount
Extra payers may change the amount of future payments upon request. Even complete termination is possible.
Important: The calculations of the pension insurance are only valid for three months. After that, interested parties must submit a new application. Other deposit conditions may then apply.
Pay back for 2021
This is possible until March 31, 2022. Advantage: The deposit conditions in the current year are more favorable than in 2021.
Observe time specifications
The following applies here: Applications for additional payments for training periods can only be made before the 45th birthday. Compensation payments for early retirement can be applied for at the earliest from their 50th birthday. Anyone who draws an old-age pension without deductions can no longer make a compensatory payment.
Anyone thinking about early retirement can make voluntary contributions to the pension fund.
This applies to two groups:
Anyone who pays voluntary contributions to the pension fund as a future early retiree will only receive the increased pension when they reach the so-called standard retirement age.
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It is usually worthwhile for tax purposes to make the extra payments during your working life. Because then the tax-reducing effect is higher.
Anyone who only gets a larger sum of money in early retirement can have a consultant from the German pension insurance and an income tax assistance association calculate whether it is worth paying the money into the pension fund. The values of the two following sample calculations refer to the specifications up to and including June 30, 2022.
Sample calculation 1
Early retiree A.: childless, insured with the statutory health insurance for retirees
Annual pension: EUR 21,600 (EUR 1,800 per month)
Extra deposit in 2022: 7343.28 euros
Pension increase: EUR 34.70 gross monthly (before July 1, 2022)
Tax savings with the extra payment: 933 euros in total
“Own contribution” of the extra deposit: 6410.28 euros (extra deposit minus tax savings)
Sample calculation 2
The early retiree pays the maximum amount of 15,735.60 euros extra. This increases his gross monthly pension by EUR 74.36. In this case, too, he can “only” save 933 euros in taxes. The bottom line is that the early retiree pays 14,802.60 euros out of his own pocket.
For the early retiree, it could be worth stretching the extra payments over several years because the tax authorities would then be even more involved.
Those who have not yet celebrated their 45th birthday can pay contributions for school, training and studies.
In these cases, there is no upper limit of EUR 15,735.60 as in the case of early retirees. Another advantage: These extra payments are one of the few ways for employees to top up their pension. This is otherwise only permitted from the age of 50 (see next sample case).
Only those who are subject to compulsory pension insurance can pay for their training period
However, the above only applies if the training period for which contributions are to be paid retrospectively is not yet covered by other periods under pension law. This includes training for up to eight years from the 17th birthday.
Depending on the type of pension, employees must complete long minimum insurance periods (“waiting periods”) in order to start early. They are at least 35 years old.
These waiting times can be filled up with additional payments. This also applies to the five-year minimum insurance period for the regular old-age pension.
Sample calculation:
The 41-year-old employee B. is 41 years old, has statutory health insurance, is single and has no children.
For an early retirement at the age of 63, she would be missing twelve months of insurance. But because she studied for a long time and was still going to school at the age of 16, she can pay 18 additional monthly contributions.
Because Ms. B. is only interested in reaching the minimum insurance period, she pays the minimum contribution for the 18 months: a total of 1506.60 euros, i.e. 83.70 euros per month. These extra contributions bring her a monthly pension increase of 7.12 euros.
Ms B. also saves on income taxes: With an annual income of 62,311.50 euros, the extra payment into the pension fund brings her a tax reduction of 544 euros – a good 36 percent of her back payment.
Older employees can top up their pension with so-called compensation payments.
The extra payments can be used to compensate for deductions that occur if you retire earlier. Anyone who pays the extra amounts into the pension fund but does not retire earlier can use this model to top up their old-age pension.
Important: Insured persons do not have to set an exact start date for their pension at the time of payment.
These special payments may exceed the 15,735.60 euros, which is the maximum for voluntary contributions. This gives insured persons the opportunity to do something for their statutory old-age provision with high payment amounts relatively shortly before retirement.
The Treasury evaluates these payments as pension expenses. A maximum of 25,639 euros can be estimated for this in 2022. That sounds like a lot, but a few items still have to be deducted from the amount.
Because the 18.6 percent of the gross salary that flows monthly into the pension insurance – as employer and employee share – count here.
Each month of early retirement costs a 0.3 percent deduction. So if you would have to retire at the age of 67 but want to bring it forward four years, you have to pay a deduction of 14.4 percent. The formula for this is: 48 months 0.3 percent = 14.4 percent. With a monthly pension of 1,500 euros, that would be a deduction of 216 euros – per month and for life.
Sample calculation:
The 50-year-old skilled worker C. would like to compensate for the deductions for early retirement at the age of 63. She has no children, has statutory health insurance and in 2022 will earn exactly the average amount of all those with statutory pension insurance – 38,901 euros.
According to the current value, the 14.4 percent deductions would amount to EUR 220.01 per month. To compensate for this, 54,393.69 euros extra deposits are required. Ms C. can also choose a lower amount and only partially compensate for the loss.
If Ms. C. then only retires at the age of 67, her extra payment has the effect of an increase in pension. According to calculations by Stiftung Warentest, she increases her pension by EUR 257.02 a month.
The FOCUS Online Guide answers all important questions about pensions on 135 pages. Plus 65 pages of forms.
With an extra payment of 54,393.69 euros, Ms. C. saves 4663 euros in taxes. So the bottom line is that she “only” pays 49,730 euros out of her own pocket.
The tax savings account for 8.6 percent. Because only 18,403.41 euros of your payment have a tax-reducing effect, because it achieves the maximum rates. Ms. C. can get a higher tax refund if she spreads her extra payment over three years.
However, the calculation parameters for compensation payments change almost every year. This can mean: In later years, the payments bring slightly lower pension payments than originally calculated. Or they may have to deposit more money for the original raise.
In its statements on voluntary payments into the pension fund, Stiftung Warentest also determines the respective special features
You can find the details online at Stiftung Warentest.
