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Germany Finalizes 2026 Pension Changes, Adding ‘Active Pension’ and Tax Shift

The reform seeks to bolster retirement security by pairing updated benefits with incentives to keep experienced workers employed.

Overview

  • Millions of pensioners are projected to receive about 3.73% more from 1 July 2026, with the final rate to be confirmed in spring once full wage data are available.
  • From 2026, new retirees will have 84% of their first full-year pension taxable, with the taxable share rising by 0.5 percentage points annually toward full taxation by 2058.
  • The new ‘Aktivrente’ allows retirees in social‑insurance‑covered jobs to earn up to €2,000 per month tax‑free to encourage continued employment past retirement age.
  • Riester will close to new contracts in 2027 as a state‑backed ‘Altersvorsorgedepot’ launches, with payments treated as retroactive from January 2026 and existing Riester contracts unaffected.
  • Operational and labor‑market changes from January 2026 include pension payments by bank transfer only, a higher Minijob ceiling of €603, and a €13.90 statutory minimum wage; late account updates may briefly interrupt payments but arrears will be settled.