Germany's 'Aktivrente' Lures Seniors Back to Work Even as Early Retirement Claims Soar
Published on 06/19/2026 at 11:35 | Redaktion boerse-global.de
Since the start of 2026, German pensioners have been allowed to earn up to €2,000 a month tax-free under a new rule called the Aktivrente. That incentive appears to be working. In the first quarter of 2026, the number of full old-age pensioners remaining employed at small and midsize companies rose 2.1 percent compared with the same period a year earlier, according to data from the software firm Datev. By March the increase had accelerated to 3.2 percent.
Analysts estimate the Aktivrente generated roughly 9,000 additional workers aged 65 and over in the first quarter, equivalent to about 4,300 full-time jobs. Yet at the same time, the number of people who retire early but keep working on the side is also climbing sharply — and putting the state pension system under growing strain.
The lifting of all earnings limits for early pensioners in 2023 triggered a surge. A study released Friday by the German Economic Institute (IW) shows that the share of early retirements among so-called long-term insured employees — those who have contributed for at least 35 years — jumped from 19.4 percent of all new pensions in 2020 to 24.0 percent in 2024. Among workers with 45 or more contribution years, the proportion taking a job beyond a minijob alongside their early pension rose from 10 percent in 2019 to 25 percent in 2023. By contrast, only 11 percent of those who wait until the standard retirement age continue working at all.
The IW concludes that the current rules make early pension claims financially attractive while adding heavily to the system's expenditure side. The demographic backdrop only intensifies the pressure: By 2036 nearly 20 million baby boomers will have reached retirement age, shrinking Germany's labor force by an estimated 4.3 million people. The regions expected to be hit hardest are Saarland, Saxony and Bavaria.
In Saxony, Saxony-Anhalt and Thuringia, roughly 36 percent of new retirees in 2025 already opted for the long-term insured pension, which paid an average of €1,260 per month. Those regional figures underscore how widespread early exits have become.
Business groups are calling for a radical overhaul. The CDU's Economic Council warned Friday that without reforms social insurance contributions could hit 50 percent of wages by 2035. It wants to scrap the basic pension, the so-called mothers' pension and the "pension at 63" scheme, and to link the retirement age to life expectancy. An Ifo Institute study from June 17 estimated that such reforms could save the state up to €20 billion annually. DIW President Marcel Fratzscher has proposed extending working life by eight months for every additional year of life expectancy.
Social welfare associations VdK and SoVD have pushed back, warning against benefit cuts and demanding a heavier reliance on tax revenue instead. The government is now moving ahead with concrete steps. A pension commission finalised roughly 30 recommendations yesterday. Chancellor Merz and Social Minister Bas are scheduled to present them next Tuesday. Parliament is expected to debate a legislative package before the summer recess.
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