Unemployment and early retirement? This can cost waiting time

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The old-age pension for those who have been insured for a particularly long time rewards those who can prove that they have been in the pension insurance scheme for at least 45 years. Those affected can retire two years before the normal retirement age, and without any deductions.

With shorter waiting times, the discounts are hefty

Early retirement is also possible for those who have been insured for a long time and who can prove that they have been in the pension insurance scheme for at least 35 years. However, they have to pay a reduction for each month they retire early.

And that's not a small amount. Each month of early retirement costs 0.3 percent of your pension, and that's for your entire life – up to a maximum of 14.4 percent of your total pension.

Early rent without deductions has strict criteria

What many people do not know and can come as a nasty surprise: the old-age pension for those who have been insured for a particularly long time is subject to stricter conditions than the early pension with deductions for those who have been insured for a long time.

Other waiting times apply

For example, certain periods that are counted as waiting periods in other types of pension are not taken into account in the early pension without deductions for those who have been insured for a particularly long time – or they are only taken into account in exceptional cases.

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Unemployment can cost you your pension

For example, unemployment while receiving unemployment benefit I in the two years prior to the start of early retirement is only taken into account as a waiting period for those who have been insured for a particularly long time in special cases.

An exception exists if the cause of unemployment is the insolvency of the company/firm in which the person concerned works.

This regulation only applies to the last two years before early retirement without deductions would come into effect. In statutory working life, waiting periods for particularly long periods of insurance are also defined for old-age pensions, during which those affected receive unemployment benefit.

What is the problem now?

This special rule is intended to prevent employees who could claim an early retirement pension without deductions from quitting their jobs in the months (or two years) before the start of this type of pension in order to be able to start the early pension even earlier.

The danger now for those who are close to completing their 45 years of insurance is that two years of unemployment will create a crucial gap in this waiting period.

After two years of unemployment, you are in the same situation as when you first became unemployed, and instead of the early retirement you expected, you either have to continue working or take early retirement with reduced benefits.

The mini-job fills the waiting time

However, there is a way to fulfill the waiting period, even if you lose your actual job at the end of your working life or are simply tired of working full-time.

The waiting period is independent of the level of earnings, and a mini-job in which you pay pension contributions counts towards the same waiting period as a full-time job.

If you are threatened with unemployment in the last few years before early retirement, then look for such a minor job and retire.