Inflation in the country, which has been so high for months, is also having an unusual impact on pension benefits. As the Labor Chamber has now calculated, the time of retirement can have enormous financial consequences for retirement. 300,000 people will be affected in the coming years.
The problem of aliquoting is already known, which makes it attractive to start earlier this year. Due to the high inflation, the pension adjustment in 2024 will be around 8 percent. But only those who retire in January will receive the full increase the following year. Then the value decreases from month to month. So if you retire in November or December, you will not receive a plus for the first full year of pension.
This means that people who retire on 1 January 2023 will also receive 8 percent more pension from 2024 to protect against inflation. On the other hand, people who don’t retire until November 1 would fall completely without the much-needed correction for inflation.
Unfavorable calculation period
But there is also the so-called value protection. An annual revaluation is intended to ensure that pensions hold their value, ie develop in line with wages in the country. Since deals were particularly high this year given inflation, there should also be a particularly high revaluation factor.
However, since a value is used here that results from the wage development of the year itself, but from a comparison of the two previous years. This means that the current high wage settlements are only used with the 2025 revaluation factor (ie an income equation for the years 2022 and 2023).
Less pension for life
According to the AK calculation, this deferred revaluation alone leads to a lifelong “pension discount” of 90 euros per month if you retire this year with a fundamentally due pension entitlement of, for example, 2,000 euros. If you retire next year, the damage will increase to 160 euros per month. The AK therefore demands that the government withdraw a safeguard clause.
It concerns tens of thousands of euros
About 100,000 people are affected by the quasi-losses each year, and about 300,000 over the next three years. Anyone who retires towards the end of the year and who does not benefit from the extraordinarily high plus of the partial supplement must expect considerably lower pensions in the long term.
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. Add to that the problem with value protection and you are already at 74,000 euros.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
