Buying out a German early retirement reduction
Enter your pension points at the start and the months you plan to go early: the calculator gives the amount that fully offsets the reduction.
Worked through by Radif Partners · Editorial policy · How we calculate
Buy-out payment
€31,483
restores €128.58 of pension a month
| Reduction | 7.2 % |
|---|---|
| Price per point | €9,661.58 |
| Paid back after | 20.4 years |
Step-by-step calculation
- Reduction 24 × 0.3% = 7.2 %: 42.00 points × 7.2 % = 3.0240 points lost (€128.58 a month).
- One point costs, in 2026, the 18.6% contribution rate × provisional average pay €51,944 = €9,661.58 (section 187(3)).
- Because the points bought are reduced too, divide by the access factor 0.928 (section 187a(3)): 3.0240 ÷ 0.928 × €9,661.58 = €31,483.
- The binding amount comes in a statement from the pension insurer, available from age 50; part payments are allowed.
Estimate under SGB VI and the Income Tax Act as of October 2026, not advice. Only your pension decision letter is binding. How we calculate
A buy-out payment (Ausgleichszahlung) lets you buy, before your German pension starts, the pension points that an early start would cost you (section 187a SGB VI). In 2026 one point costs the 18.6 % contribution rate times the provisional average pay of €51,944, which is €9,661.58. Because the points you buy are reduced as well, the amount is divided by the access factor (Zugangsfaktor). An example from the calculator: with 40 pension points and a start two years early, 2.88 points or €122.46 of monthly pension are lost, and a full buy-out costs €29,984. The higher pension pays this back after about 20.4 years. You first need a statement from the pension insurer, available from age 50, recording that you intend to retire early. You can pay until the standard retirement age, in instalments if you like; nothing is refunded.
What the calculator shows
You enter two numbers: the pension points (Entgeltpunkte) you expect to have when your pension starts, and the months you want to go before your unreduced date. From these the tool works out the reduction (0.3 % a month under section 77 SGB VI), the points and monthly amount lost, the price of a full buy-out and the years it takes the higher pension to earn that sum back. The price of a point is set by section 187(3) SGB VI: contribution rate times average pay. For 2026 that is 18.6 % and a provisional €51,944 (2026 reference values), together €9,661.58.
Amounts for a full buy-out
| Pension points | 12 months (3.6 %) | 24 months (7.2 %) | 36 months (10.8 %) | 48 months (14.4 %) |
|---|---|---|---|---|
| 30 | €10,824 | €22,488 | €35,094 | €48,759 |
| 40 | €14,432 | €29,984 | €46,792 | €65,013 |
| 50 | €18,040 | €37,480 | €58,489 | €81,266 |
The grid shows how much the early period matters. With 40 points, one year early costs €14,432 and four years €65,013: more than four times as much, because the access factor falls each month and the divisor shrinks. The number of points, by contrast, works in a straight line: a quarter more points cost a quarter more.
The calculation step by step
Take someone expecting 40 pension points who wants to go 24 months early. The reduction is 7.2 % and the access factor 0.928. She loses 2.88 points, worth €122.46 a month. For exactly those points to arrive after the cut, she has to buy 2.88 ÷ 0.928 = 3.1034 points (section 187a(3) SGB VI) at €9,661.58 each: €29,984. Her pension then starts two years early at the level it would have had without a reduction. Whether a reduction applies to you, and how large it is for your birthday, is shown by the early retirement reduction calculator.
Conditions and timing
It starts with a specific statement from the pension insurer. You need a legitimate interest, presumed from age 50, and must declare that you intend to draw an old-age pension early. Payment is possible until the standard retirement age, at once or in parts; the law makes no provision for refunds. Your current points are on your annual pension statement; the pension calculator projects them to your start date. If you have also worked in another EU country, the buy-out concerns only the German pension, as each country pays its own share; see pensions and moving abroad.
Limits
The tool uses only the 2026 reference values, which are set anew each year, so a payment in another year may come to a different amount. It assumes you reach the points you enter, and it ignores tax, pension increases and interest. Only the insurer’s statement gives a binding amount; for your own case, its advice centres (Auskunfts- und Beratungsstellen) are the place to ask.