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Growth Opportunities Act relieves new pensioners of thousands of euros: Good news on the subject of pensions
Good news for new retirees! With the Growth Opportunities Act, the federal government is finally addressing the problem of double taxation of pensions. This leads to relief for new pensioners; some can even receive relief of thousands of euros. The law slows down the process of pension taxation, so that pensions will not be taxed at 100 percent until 2058. A study by tax expert and financial mathematician Werner Siepe shows that new pensioners will be able to keep more of their pension tax-free from this year. According to Siepe, high earners who were born in 1975 can have received a salary at the contribution assessment limit for 40 years and then receive a pension for 17 years, in total...
Growth Opportunities Act relieves new pensioners of thousands of euros: Good news on the subject of pensions
Good news for new retirees! With the Growth Opportunities Act, the federal government is finally addressing the problem of double taxation of pensions. This leads to relief for new pensioners; some can even receive relief of thousands of euros. The law slows down the process of pension taxation, so that pensions will not be taxed at 100 percent until 2058. A study by tax expert and financial mathematician Werner Siepe shows that new pensioners will be able to keep more of their pension tax-free from this year.
According to Siepe, high earners who were born in 1975, have received a salary at the contribution assessment limit for 40 years and then receive a pension for 17 years, can keep a total of around 72,000 euros additional tax-free. For pensioners who have earned an average of 45 years, it could be an additional 43,000 euros. The specific effects are shown in the table in the article.
An example illustrates the relief for new pensioners: A single retired engineer with a pension of 2,200 euros can keep 17.5 percent of his pension tax-free thanks to the Growth Opportunities Act. This means he would only have to pay tax on 822 euros per month.
The Growth Opportunities Act is necessary to eliminate double taxation of pensions, as determined by the Federal Finance Court. However, the Ministry of Finance is planning further adjustments as the issue of double taxation has not yet been fully resolved. Individual allowances are being discussed. There is concern that the issue will become a never-ending story.
These innovations have a significant impact on the market and the financial industry. New retirees can benefit from a higher net pension, which gives them more financial freedom. In addition, the pension reform can strengthen trust in the pension system and make retirement provision more attractive. Increasing purchasing power among newly retired people could also have a positive impact on consumption.
Source: According to a report from www.merkur.de, October 30, 2023, 4:34 p.m
Read the source article at www.merkur.de