Active towards retirement: can work be more attractive than free time? Image: dpa
Seniors can now receive unlimited wages in addition to an early pension. The aim is to motivate and alleviate staff shortages – but high taxes are an impediment, a study shows.
Labor Minister Hubertus Heil (SPD) rejects a higher standard retirement age. But he also wants more older people to work if they want and can. That is why it was considered an important step by the traffic light coalition that you can now continue working as you wish, even if you are already receiving an old-age pension – either early or on the normal date. The additional income limit previously applicable to early retirement pension holders was abolished on 1 January.
On closer inspection, however, it didn’t become very attractive to work longer. This is now demonstrated by an analysis by the German Economic Institute (IW), which provides information on the tax and tax burden in these cases. Their conclusion: the change in law is likely to “do less to alleviate the shortage of skilled workers than to deadweight effects.” Those who already planned to reconcile retirement and work will be a little relieved with the change in the law. But salary deductions are still so high that they are unlikely to motivate anyone to do so.
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Source: DO