More Germans Keep Working After Taking Early Retirement, Complicating Reform Push
Published on 07/17/2026 at 10:53 | Redaktion boerse-global.de
Since Germany scrapped earnings limits for early retirees in 2023, the share of those who keep paying into social insurance while drawing a pension has jumped sharply. Among people who retired early after at least 45 contribution years, 25 percent now hold a regular job — up from 18 percent in 2022. For those with 35 years of contributions, the rate more than doubled, from 8 to 14 percent.
The trend adds a new twist to the debate over the so-called "Rente mit 63," the early-retirement option that lets long-career workers leave the workforce without pension deductions. A government-appointed pension commission has called for phasing out that option entirely by 2031. Instead, it proposes linking the retirement age to life expectancy — pushing the threshold to 67.5 years by 2041 — and introducing a mandatory funded supplementary pension with a 2 percent contribution rate.
Women claim early retirement at similar rates — but get paid much less
Between 2015 and 2025, women accounted for 44.4 percent of all new early pensions awarded to people with at least 45 contribution years. In 2024 alone, Germany’s statutory pension system registered 262,000 such entries, 117,000 of them women — a share of 44.7 percent. The highest female share in any single year was 45.8 percent, recorded in 2019.
Yet pension amounts reveal a stark gap: women on average receive €1,469 per month, while men get nearly €400 more.
Baby boomers drive the early-exit wave
More than half of the 1957 and 1958 birth cohorts — the heart of the baby-boom generation — have already taken early retirement: 51.2 percent and 51.7 percent respectively. Overall, about 1.1 million baby boomers were drawing an early pension in 2024.
Although the standard retirement age has been raised by 12 months since 2012, the actual average age at which people exit work has increased by only eight months. Roughly 6.4 million baby boomers will reach the current standard retirement age by 2029, a wave that is expected to intensify pressure on the pension system.
Reform proposals draw political support — and fierce opposition
Conservative leader Friedrich Merz and Bundestag president Bärbel Bas back the commission’s recommendations. Trade unions and opposition parties have condemned the plan. The German Institute for Economic Research (DIW) calculates that the overhaul could save the system about €10 billion per year.
A separate measure, the so-called "Aktivrente," took effect in early 2026: retirees can earn up to €2,000 tax-free without affecting their pension. Experts warn this creates a perverse incentive — many collect the deduction-free early pension and then top it up with part-time work. For people with health limitations, policymakers are discussing a separate "protection pension" that would allow earlier access without penalties.
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