Those who work for a year longer can count on an increase in their starting pension of between 100 and 200 euros per month, depending on profession and income. This is the conclusion of a study presented by the economic research institute on Monday for the Action for Generational Justice association. The values relate to the corridor pension to be taken up between the ages of 62 and 68 and are calculated on an income from work in 2019.
The Wifo study investigates the impact of different retirement dates within the corridor pension on the level of the individual first pension and lifetime income for several model careers, both sexes and seven occupational groups. Furthermore, the consequences of later retirement for the government budget are calculated. Contrary to the standard retirement age of 65 (for men), the corridor pension offers the option of retiring between the ages of 62 and 68 with reductions or supplements.
low-income groups
For occupations with a low income from work and a fixed income throughout life (particularly sales, personal services, crafts, machine and factory operation and unskilled workers), an additional year of employment increases the net first pension by about 120 euros per month ( 14 times a year at 2019 prices and wages).
middle income groups
In the occupational groups with a middle income and a slightly rising income (office staff), an extra year of employment increases the net initial pension by approximately 150 euros per month (14 times per year).
higher income groups
In the occupational groups with a higher income level and an income that rises faster with age (technical specialists, academic professions), an extra year of work increases the net first pension by approximately 180 euros per month (women) or 200 euros per month (men).
The effect on the amount of the first pension is usually greater for men because they have a higher average income from work. The differences between men and women are greatly reduced by the withholding of wage tax and social security contributions.
Women benefit more from working longer
The net increase in life income from retiring at age 63 compared to retiring at age 62 is between 1.5 and 3.2 percent. Full utilization of the corridor up to age 68 allows for an increase in lifetime income of between 7.5 and 17.5 percent compared to retirement at age 62. In both model careers (with and without children), women benefit slightly more than men from the longer period of employment because they have a longer life expectancy and the retirement period is therefore longer.
In all case studies, the government’s financial balance improves as people retire later. Converted to the year 2019, the surplus per person is between one tenth and 5.5 times the average annual salary of employees in 2019. The duration of the ancillary work and the affiliation to the professional group are the most important influencing factors.
Effects on the relevant retirement date
The least impact on the government budget is that women from the occupational groups of machine and installation operators and unskilled workers who retire one year later have the least impact. The greatest impact on the state budget occurs when male academics and technical specialists or female academics do not retire until they reach the age of 68. The surplus is then 3.5 to 5.5 times larger than the average annual salary of employees in 2019.
Source: Krone
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