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The pitfalls of when to retire

The pitfalls of when to retire

This is the result of a calculation by the Chamber of Labor available to the APA. The culprit is inflation, which has unusual effects on the retirement benefit due to its level. The problem of aliquoting is already known, which makes it attractive to start earlier this year. But there is also the so-called value protection.

An annual revaluation is intended to ensure that the pensions are value-secured. This revaluation factor results from the wage development. Since this year’s deals were particularly high due to inflation, there should also be a particularly high revaluation factor.

However, this is not the case, because the wage development of the year itself is not used, but the factor is created by comparing the average wage development between the third and second preceding calendar year. This means that the high wage settlements due to the high inflation will only be included in the pension entitlement or in the pension account with the revaluation factor 2025 (if the incomes in 2022 and 2023 are compared).

required a safeguard clause to be withdrawn

According to the AK calculation, this delayed revaluation alone leads to a lifelong “pension reduction” of 90 euros per month if you take retirement this year with a fundamentally due pension entitlement of, for example, 2,000 euros. If you retire next year, the loss increases to 160 euros per month. The AK is demanding that the government withdraw a safeguard clause.

In addition, there is the proportionate payment of the pension adjustment. Only those who retire in January will receive the full increase in the following year. Then the value decreases from month to month. If you retire in November or December, you won’t get a plus in your first full year of retirement.

With a pension level of EUR 2,000 again in January 2023 and an inflation rate of eight percent, pensions are expected to increase by EUR 160 from 2024. Those who leave in March, for example, will still receive EUR 128. Those who leave towards the end of the year and of that extraordinarily have nothing, have to reckon with significantly lower pensions. From next year there will be a permanent loss of 160 euros per month, the AK calculates. With an average subscription period, that would be 47,000 euros. If you add the problem with the value protection, you are already at 74,000 euros.

Around 100,000 people are affected by the quasi-losses every year, and around 300,000 in the next three years.

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Source: Nachrichten

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