The retirement allowance is a tax allowance. It is available to taxpayers over 64 years of age and depends primarily on gross wages and the calendar year in which taxpayers turn 64.
Fair taxation for seniors: benefits in old age
According to the website steueren.de, the age relief amount is intended to lead to fairer taxation in old age. Various tax concessions result in fairer conditions for taxpayers over 64 years of age.
The portal’s article explains that the amount is calculated from a certain percentage, but this is capped at a maximum amount. However, the two components decrease with each new age group that is added. However, the calendar year from which the relief amount becomes possible for the first time is decisive.
First, the percentage to be taken into account for the respective year must be taken into account. So the share of wages from active work. In addition, the percentage of the positive sum from other income must be taken into account. This includes income from rentals, capital assets and self-employment. Ultimately, the maximum amount must also be taken into account.
Tax advantages in old age: Retirement or not, age is decisive
Stiftung Warentest explains that around a third of pensioners would submit tax returns. However, the allowances that make the retirement allowance possible reduce this tax burden. Regardless of whether you are already retired or not, everyone who has reached the age of 64 is entitled to this.
However, for those who are eligible earlier, the model is more profitable. The article from Stiftung Warentest explains that those who were 64 years old on January 1, 2023 can exempt a full 13.6 percent of their income from tax. However, for people born on or after January 2, 1975, the percentage drops to zero.
Individual calculation: requirements and amounts vary
The basis for calculating the age relief amount is personal, so the benefits of those entitled can vary accordingly. This means, according to Steuer.de, that it is not possible for spouses to merge. In this case, the allowance does not double, but is determined individually for each partner.
Basically, there are different tax rules for different types of income. Which is why, according to Stiftung Warentest, it is difficult to determine at first glance whether and to what extent you are entitled to the retirement allowance.
Editorial team finanzen.net