According to a new study by the Institute of the German Economy (IW), only 37 percent of a specific birth cohort retired at the standard age last year, with the remainder choosing early retirement. The trend toward leaving the workforce before reaching the statutory retirement age continued in 2025, when 1.1 million people from the 1960 to 1963 cohorts received an old-age pension despite not yet meeting the regular age limit. This short report was provided to the German Press Agency in Berlin.
The investigation focuses on the retirement behavior of Baby Boomers, the large birth cohorts starting from the mid-1950s. In 2025, nearly seven million Baby Boomers received an old-age pension. More than half of these cohorts transitioned into retirement before reaching the gradually increasing entry age of 67. This represents a significant increase compared to 2023, when only around 4.5 million people in these groups had received an old-age pension.
Regarding early retirement without deductions, more than one in four individuals from the youngest cohort beyond the standard age limit, the 1958 birth year, retired early as particularly long-term insured persons with 45 years of contributions. Additionally, 18 percent received a pension for long-term insured persons with 35 years of contributions, though this option involves deductions.
The availability of popular early retirement options without financial penalties is currently a point of contention within the coalition government formed by the Union and the SPD. While there is agreement that possibilities for early retirement should be restricted as part of a comprehensive reform, the extent of these limitations remains disputed.
For the 1958 birth cohort, the study notes that only 37 percent receive an old-age pension at the standard age limit, excluding those on full disability pensions. Although statistics show 45 percent were technically standard-age retirees, 17 percent of this group had switched from a full disability pension to a regular one. Only three percent of the 1958 cohort received no statutory old-age pension. The IW attributes this high coverage rate to low-threshold access requirements, noting that just five years of insurance time is sufficient to qualify for a pension.
Researchers are urging the government to utilize the current window of opportunity for pension reforms. They warn that without changes to early retirement provisions, the aging population will shift the financial burden toward contributors and taxpayers.
Sources: FAZ.