German Pension Commission Targets 'Retirement at 63' as Health Data Shows Workers Already Leaving Early

A government-appointed pension commission has recommended abolishing the contribution-based early retirement rule known as "Rente mit 63," a benefit that allows workers with 45 years of contributions to retire without deductions before reaching the standard retirement age. The proposal, delivered to Chancellor Merz and Minister Bas on June 23, 2026, is part of a 33-point stabilization package that also includes a mandatory funded supplementary pension modelled on Sweden's system.

The commission's report comes as fresh health data reveals that more than half of older employees across Germany are already planning to exit the workforce ahead of schedule. According to the DAK-Gesundheitsreport 2026, 47 percent of workers aged 50 and above in Mecklenburg-Vorpommern intend to retire early; the national figure stands at 52 percent. Among those who rate their own health as poor, 51 percent said they plan to leave early.

Sickness absence rates underscore the problem. In Mecklenburg-Vorpommern, the sick leave rate for employees over 50 reached 8.7 percent – well above the national average of 7.4 percent. Among 66-year-olds still working, the rate hit 11 percent. The analysis drew on data from 64,000 insured individuals and a Forsa survey.

The baby-boomer generation is driving the trend. The Institut der Deutschen Wirtschaft (IW) calculated in July 2026 that about 1.1 million baby boomers drew an early old-age pension in 2024, up from 0.9 million the previous year. Overall, roughly six million baby boomers were receiving a pension. The IW noted that while the standard retirement age has risen by twelve months since 2012, the actual average retirement age has only increased by eight months.

One factor behind the surge in early take-up: the removal of supplementary-earnings limits in 2023. Among those with 45 years of contributions who qualify for the full early pension, the share combining pension and salary jumped from 18 percent in 2022 to 25 percent in 2023.

The commission's core recommendation – scrapping the deduction-free early retirement after 45 years – would save the federal budget an estimated ten billion euros annually, according to the Deutsches Institut für Wirtschaftsforschung (DIW). The report also proposes a 2:1 model linking the retirement age to life expectancy, which could push the standard retirement age to 67.5 by 2041.

Kanzler Merz and Minister Bas have signalled support for the package. Health insurers, meanwhile, are pressing companies to do more for older employees. They call for health-promoting working conditions, flexible schedules, and greater recognition. Surveys show older workers also cite higher pay as a prerequisite for staying in the job longer.

Since January 2026, the "Aktivrente" has been in place, offering incentives for continued work. But IW economists warn of unintended consequences: allowing workers to collect a full pension while still earning a salary may actually encourage more people to retire early, rather than remain fully employed until the standard age.

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