German government proposes major pension reform, ending early retirement at 63

The coalition government plans to abolish the “Rente mit 63,” the discount‑free early pension after 45 contribution years. The Rentenkommission recommends removal of the benefit, limiting early retirement without penalties to hardship cases subject to a medical review.

The SPD demands a longer transition period of up to five years to give affected workers certainty, while the CDU‑aligned Union pushes for a faster rollout, suggesting a two‑year window. Both sides cite concerns about contracts, age‑part‑time arrangements and social acceptance.

Beyond the early‑pension change, the government intends to link the statutory retirement age to life expectancy, gradually raising it from 67 for those born up to 1964 to higher ages for later cohorts. Projections show a possible “Rente mit 68” in the early 2040s, “Rente mit 69” in the 2050s and “Rente mit 70” in the 2060s. Parallel measures include modest tax adjustments and proposals to limit fixed‑term contracts, aiming to secure the pension system’s finances amid a shrinking contributor base.