Initiative Neue Soziale Marktwirtschaft (INSM)
Retiring at 63 is very popular. Since July 2014, people who have paid into the statutory pension insurance scheme for at least 45 years can retire at the age of 63 on a full pension. In 2021, around 30 percent of new pensioners took advantage of this opportunity. Prognos’ short study shows the consequences of retirement at 63 and investigates what would happen if this pension for the particularly long-insured persons, was abolished.
First, we analysed the impact of past pension reforms on the participation of older people in the labour market. We also estimated the effect of pensions at 63 on the labour market in the period from 2014 to 2022.
In the next step, we calculated the impacts that abolishing pensions at 63 would have on the long-term financial development of statutory pension insurance and the labour market. We simulated the consequences for pension finances with our social security model, OCCUR.
We examined two scenarios: on the one hand, the immediate implementation of pension at 67 without exceptions from January 2024, and on the other, the gradual abolition of the exemptions for particularly long-term insured persons by 2031. The legal status quo is used as a reference scenario.
The pension level currently stands at 48.1 percent of last gross income and will fall significantly in the coming years. Politicians are faced with the difficult task of closing the gap, which is in light of demographic change, is becoming increasingly difficult. Other measures to reduce them include:
Study: Pension with 63 – Quo vadis? (PDF in German)
Social contributions in focus (in German)
Pension needs over time (in German)
Reliable intergenerational contract (in German)The future of statutory pension insurance (in German)
Inclusion of civil servants in statutory pension insurance (in German)
Effects of the statutory minimum wage on pension development (in German)
Florian von Hennet
Press Officer Initiative Neue Soziale Marktwirtschaft INSM
Tel.: 030-27877 174
Dr Stefan Moog (Project Manager)
Phone: +49 761 7661164-812
Project team: Dr Stefan Moog, Dr Oliver Ehrentraut, Leilah Dismond
Last update: 30.05.2023
Partner, Director, Head of Economics Division
Calculations on inflation-related additional private household expenditure and the work of the Federal Government's relief package.
Study compares “boomers” and Generation Z: high need for security for young and old alike.
Corona tests are designed to help reduce the incidence of infection. Prognos has now quantified the benefits of testing on the economy and health care.
For the Robert Bosch Foundation, Prognos conducted a workshop with integration stakeholders from districts, municipalities, and cities.
The annual expenditure of social long-term care insurance will continue to increase in the coming decades according to the results of a Prognos study for the Bertelsmann Foundation.
Germany will become more global, more digital, greener and older in the next 30 years. This is shown by Prognos Deutschland Report from 2018/2019.
What are the financial implications of possible changes in the pension system? With the virtual calculation tool ‘Pension Minister’ central levers of pension insurance can be operated.
A stronger employment orientation for women can help to stabilise the public pension system – while also benefitting their own financial position in old age.
How high the pensions will be for a typical employee depends, among other things, on the occupation and the place of residence. This is the result of recent research by Prognos for GDV.
Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.