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How to find out the size of your future pension?
We constantly hear this question from compatriots who have recently moved. There are many calculators on the Internet, but with unclear coefficients. Let's try to explain it in an accessible language.
📍The old-age pension is laid at 67 years old (from 2031).
You can leave even earlier than this age if your pension contribution experience is more than 35 years. But at the same time, the amount of your monthly pension will decrease.
📍If you moved to Germany and got a job at the age of 32 and older, then there is no need to talk about earlier retirement. As one well-known grandfather used to say: arbeiten, arbeiten und noch mal arbeiten😅
🧮Now in numbers. The calculation formula looks like this:
MR = EP x ZF x AR x RF
Monatliche Rentenhöhe = Entgeltpunkte x Zugangsfaktor x Aktueller Rentenwert x Rentenartfaktor
✏MR (Amount of monthly pension) = EP (earning points) x ZF (access ratio) x AR (current pension) x RF (pension type coefficient)
✔EP - points earned by you. Depends on the salary (salary) and its relation to the average in Germany. In 2021, the average salary is EUR 41. If your salary is 541'20 - you will receive 770 points, if 0,5'41, then 541 point, if 1'62, then 311 points, but not more than 1,5 points per year. Points can also be obtained for having a baby.
✔ZF - the coefficient of retirement. When leaving at 67 years old - coefficient 1,0. When leaving 1 month earlier than 67 years old, the coefficient is reduced by 0,003; 1 year earlier - 0,036; and earlier by 4 years - 0,144.
It also works in the opposite direction.: worked 3 years longer - get extra eighteen%. The pension is increased by 18% per month or by 0,5% per year, in the case of work after the due date for retirement.
✔AR - the cost of 1 point. In 2021, in the Western Lands, 1 point is equal to 34,19 Euro. In the Eastern Lands - 33,23.
✔ RF - type of pension. Consider a coefficient of 1,0. There are disability pensions, survivors' losses and other individual cases.
Link to the calculator on the DRV website
📍 Consider an example:
Ivan Musterman moved to Germany at the age of 35 and from the first day he has been working as an engineer with a salary of 60'000 Euro per year or 5'000 per month.
📍MR = EP x ZF x AR x RF
✔EP = 1,44 points (60'000 / 41'541) x 32 (years of experience up to 67 years) = 46,22 points
✔MR = 46,22 x 1 x 34,19 x 1 = 1'580 Euro.
✏The size of the monthly pension = 1'580 Euro or 32% of your salary.
We hope the meaning of the calculation has become clearer. Of course, there are many more nuances.
❓Reasonable question - how to increase your pension?
❗ The solution could be private pension and others financial instruments.
According to DRV forecast, the average pension by 2030 will amount to 44,3% of Gross income
