Germany raises retirement age as pension reform abolishes Rente mit 63

The German government has agreed on a pension reform that links the statutory retirement age to life expectancy, moving the standard exit age upward and ending the “Rente mit 63” early‑retirement option. The Rentenkommission proposes eliminating the 45‑year contribution shortcut, raising the earliest reduced‑pension age to 64 and gradually tying the future retirement age to a two‑to‑one model of life‑expectancy gains. A new “Schutzrente” will replace the former free‑exit pension, requiring a health assessment and offering protection only in hardship cases.

The reform will affect millions of workers, raising the retirement age for cohorts born after 1965 and extending the working life of baby‑boomers. Parallel measures include a tax‑free ceiling for monthly pensions (€1 475 in the East, €1 478 in the West) and a 4.24 % pension increase effective 1 July 2026. Analyses show that caregivers who do not receive pension points for intensive care risk lower pension entitlements, while many citizens express scepticism: surveys indicate that two‑thirds see no personal benefit, and a majority of older Germans still prefer early retirement.

The changes aim to alleviate pressure on the pension system, which currently faces a dwindling contributor base as life expectancy rises, and to curb a growing risk of poverty pensions, especially in the former East.