Who You can only retire at 70has to set up his retirement planning differently than someone who wants to retire in their mid-60s. The reasons:

• higher probability of unemployment before retirement
• higher likelihood of illness
• longer savings period

What does this mean for your private pension provision?

Example 1: Retire at 70

If you can and want to work until you are 70, Your private pension situation could relax a little. You have longer to put money aside and your time in retirement may also be reduced. Especially at the end of a savings phase, additional years of savings bring a lot of money. For example, if you put aside 100 euros every month and get a four percent return, After 35 years you would have 74,700 euros, after 40 years it would be 93,100 euros.

Caution: The likelihood that the pension level will recover and be sufficient to cover your full living expenses in old age is unlikely. It is currently at 48 percent. All the measures discussed are only intended to make it sink more slowly. So you can’t avoid private provision when the retirement age increases.

However, the Germans go in earlier today anyway pensionthan you should. On average, the actual retirement age is 64.7 years, more than two years below the targeted 67 years.

Example 2: Retire at 65 or 67

If you want to retire earlier, you have to accept deductions of 0.3 percent per month throughout your retirement if you stop working earlier.

So one year costs 3.6 percent less pension, two years costs 7.2 percent. Anyone who quits even three years earlier has to make do with 10.8 percent less. With an actual pension of 1,800 euros, that would be over 190 euros less gross.

Conditions also apply. Currently, anyone who can prove 45 years of contributions can retire without deductions at the earliest at 65. With discounts, the retirement age is 63 years. It can be assumed that this limit will also be higher in the future as the retirement age increases. Purely mathematically they could From 1982 onwards, all employees will only retire at the age of 67 with reductions. The pension after 45 years of contributions is completely up for debate.

So if you still want to retire before the age of 70 with discounts, you will need significantly more money from private sources to close your growing pension gap. You can easily calculate the height yourself:

Pension gap = net household income – pension according to pension decision * deductions

With a monthly net income of 3,000 euros and an expected net pension of 2,000 euros, you would have to receive 1,000 euros from other sources every month in order not to have to limit your standard of living. Anyone who retires three years earlier has to pay an additional 216 euros per month.

Important: Anyone who no longer works but does not yet receive a pension must pay their own health insurance and cannot share the contribution with any employer. So the savings have to be significantly higher if you don’t manage to cut other expenses. Alternatively, you work at least one day a week or in a mini-job to save on insurance premiums.

Flexibility is crucial

If you want to get out earlier, you should also design your retirement provision so that it is not only paid out at the current retirement age, which can be the case with company pensions or private pension insurance. A mixture of liquid savings forms and long-term contracts helps you to be able to react to changes at any time.

How to prepare for retirement now

Depending on your age, you should adapt your strategy. Basically, the earlier you start, the better. The older you are, the higher your savings rate needs to be.

For 30 year olds:

Now is the perfect time to start building wealth. Experts recommend investing regularly in inexpensive and broadly diversified investments, such as ETF savings plans. The compound interest effect works for you over many years, so even small amounts grow over time. The important thing is to stay on the ball, rarely take a break and not let fluctuations unsettle you.

For 40 year olds:

Now it’s about identifying a clear pension gap and defining concrete goals. Check your statutory pension, possible company pensions and existing savings. A possible inheritance could also be included in your calculation. Think about how much extra money you need to retire earlier or more comfortably.

For those 50 and older:

At this age, wealth accumulation is often more limited, but there are good opportunities to improve your pension through tax optimization, for example through additional payments into the company pension plan (bAV). You should also use the time to develop a bridging strategy if you want to leave your job early. Liquidity and flexible forms of savings are now particularly important, which is why exclusively financial products such as ETFs are no longer an optimal solution.

You can see in this table who would actually be affected by the pension at 70 if it were to be introduced in the same stages as the pension at 67: