# Calculating your pension: Formula – This is how much money you will receive in retirement

Berlin.
If you want to know how much pension you will receive, you don’t have to wait for the decision. How to calculate your pension in four easy steps.

• How much pension you will get later can be found in the annual pension notification
• If you don’t want to wait for it, you can calculate your pension using a simple formula
• We explain how this works here

Anyone who has reached the age of 27 and is insured in the statutory pension will receive one once a year Pension notice sent. In the mail from the German pension insurance he or she can then read how much his or her monthly pension could be in the future.

But if you want to plan your retirement financially, you don’t have to wait for the DRV. With a simple calculation, you can determine relatively precisely how high the monthly pension will be. Whereby in the so-called Pension formula, no extraordinary investments in the pension, such as compensation payments, bonuses or even Christmas bonuses are taken into account.

To understand the pension formula one must first know how the monthly one Ugly is calculated. Four factors are decisive for this:

### Calculate your pension Step one: This is how the earnings points work

the Earnings points are calculated using the ratio between one’s own annual income and the average Annual income of all insured. According to the DRV, this is currently 40,551 euros. Anyone who earns as much as the average receives exactly one earnings point for the corresponding year. If the salary is more or less, the difference will be credited as a percentage to the earnings points. To find out, the insured person must divide his gross annual income by the average gross annual income of all insured persons.

Please note: Because of the Assessment ceiling there is a maximum salary that can be specified. The earnings that are above this maximum are no longer included in the calculation of earnings points. The income threshold is adjusted annually and is included for 2021 85.200 (West), 80.400 (Ost) Annual income.

Get to it Mothers or fathers per child born after 1992, up to three years in the pension. For children born before 1992, it is a maximum of two years and six months. The DRV calculates these years roughly as if the insured person had earned the average gross income during this time. So-called per year Child-rearing time So there is around one earnings point. Anyone who continues to work during the child-rearing period is credited with the earnings points in addition to the “normal” points. But be careful: You have to apply for the child-rearing periods yourself at the DRV and only one parent can benefit from them at a time.

Sample calculation

• A employed baker earned 30,000 euros in 2021.
• Divided by 40,551, this results in around 0.74 earnings points that will be transferred to your pension account for this year.
• The baker also has two children, for whose upbringing she receives a total of five earnings points.
• In total, the baker has been working for 41 years and, prior to 2021, had collected an average of 0.7 earnings points a year.
• In total, the baker has 34.44 pay points (41×0.7 + 0.74 + 5).

### Calculate pension Step two: That’s the access factor

Of the Access factor depends on when you retire. Those who retire when they reach the statutory retirement age have access factor 1. The standard retirement age of 67 applies to all cohorts from 1964 onwards. For every month before the Control Alter Limits retires, 0.003 points must be deducted from the access factor 1.

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The earliest possible Entry date By the way, retirement is four years before reaching the standard retirement age. Then you would have to use the maximum reduction of 14.4 percent or 0.144 points deduction on the access factor. Exceptions only apply to long-term insured persons. Anyone who has paid into the pension scheme for at least 45 years can do without it two years before reaching the standard retirement age Prints to retire.

Sample calculation

• The baker has had enough of bread, pretzels and rolls and wants to retire at 65.
• She was born in 1964 and would therefore have to work for her goal by 2029.
• Since she wants to retire two years before reaching the regular retirement age, her 24 months a 0.003 percentage points are deducted from the access factor.
• The baker’s access factor is 0.928.

### Calculate pension Step three: The current pension value

If from the Pension increase is spoken, then it is usually the Pension value meant. This figure determines the equivalent value that is paid out monthly for each earnings point collected in retirement. The pension value is adjusted every year. Depending on how the economic situation develops, the gross wages of all employees in particular develop. How exactly the adjustment is calculated lays down paragraph 68 of the Social Law Book VI. The pension value is currently im West 34.19 Euro and in East 33.47 euros. The same pension values ​​should not apply in the new and old federal states until 2025.

### Calculate pension Step four: Include the pension type factor

In the statutory pension insurance there is not only the “normal” pension, the technical jargon as well Retirement pension is called. In Germany, for example, 1.82 million people receive one, according to the DRV Disability pension. Those who are too ill to be able to work receive a pension because they are unable to work. Anyone who can work between a minimum of three and a maximum of six hours a day despite being ill receives a pension for partial disability. The type of pension is important for the pension formula, because a different one flows depending on the pension Interest rate factor with a.

• Old-age pensions, education pensions and pensions due to full disability have a factor of 1.
• Pensions due to partial disability have a factor of 0.5.
• Full orphan’s pensions have a factor of 0.2.
• Half-orphan’s pensions have a factor of 0.1.
• The widow’s pension has a factor of 0.6 if the partner was born before 1962. Otherwise the factor 0.55 applies.

Anyone who has earnings points, access factor, pension value and pension type factor together can now easily calculate how high the monthly payments from the statutory pension would be. For that the four have to values simply with each other multiplied will.

Sample calculation

• The baker assumes that she will take a normal old-age pension. Your pension factor is therefore 1.
• Your access factor is 0.928.
• So far she has collected 34.44 earnings points.
• She comes from Essen and therefore calculates with the pension value West of 34.19 euros.
• The baker would therefore currently receive a monthly pension of 1092.72 euros.

The monthly salary, which can be calculated using the pension formula, is a good one Guideline for your own Financial planning of retirement. Since the pension value in particular changes annually, one should by no means assume that the calculated value is guaranteed.

Especially since all major parties in Germany have set themselves the goal of reforming the pension. For example, be it the introduction of a Pension fundsas the Greens and FDP demand or the coupling of the retirement age to the Life expectancyas economists have suggested.

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