Overview
- From January 1, 2026, regular‑age retirees can earn up to €2,000 per month tax‑free from employment, yet example calculations show roughly €207 in health and nursing contributions on €2,000, leaving about €1,793 net.
- The Finance Ministry pegs annual revenue losses near €890 million, while independent estimates point to materially higher shortfalls of up to €2.8 billion and uptake projections range from about 168,000 to 230,000 people.
- Pensions are expected to rise by roughly 3.3% in 2026, but many new retirees face lower starting benefits and a higher taxable share of about 83–83.5%, which can erode purchasing power despite the nominal increase.
- Retirees moving abroad often become limited taxpayers in Germany and lose the basic allowance, though an application for unlimited tax liability via ELSTER can restore it if at least 90% of income is German; double tax treaties govern where pensions are taxed, with U.S. taxation exclusive to the United States.
- Administrative checkpoints are imminent: pension notices are due from mid‑November and December payments arrive on December 30; pensions must be applied for rather than automatic, and for survivor benefits inheritances are not income unless they generate taxable returns, with 40% of income above €1,076.86 counted.