You have returned from Germany to your home country. Maybe you are not aware of it, but with every paycheck you have automatically paid social taxes in Germany. Now it ist the time to start thinking about getting your money back.
The taxes you have paid are saved, which works much like a bank account. There are two options how to get back your money: you can receive a retirement pension from the earnings once you retire or you can cash out the balance now (the waiting period of two years after leaving Germany must be completed).
To sum up, to cashout the balance is only possible under certain conditions. But in many cases, the cashout is the only option to get money back at all. Why? Because the deposits in Germany are completely worthless for you, because you have not worked long enough in Germany to receive a German pension. To stay in the picture of a bank account: you have not paid in enough money into the deposit so the interest is not sufficient for a pension.
Therefore, under what conditions is a cashout generally recommended? What are the reasons why you should do a cashout?
- You have worked less than five years in Germany (60 months). This period is considered as the minimum insurance period and is the prerequisite for you to receive a pension.
- The cashout – up to approx. 7,500 € for every year that you have worked in Germany – can be used by you to build up an existence.
- You distrust the pension system and believe that you can achieve a higher return with the money.
Anyway, you don’t need any specific reason at all to cashout your money. So if you just need the money to overcome a difficult situation or fulfill a dream, you definitely should consider the option.
Regardless of whether you have already made a decision, it is advisable to carry out a pensioncheck. It shows you which periods are counted in the German pension system and it can tell you whether a cashout is possible and what amount you can expect.
You should keep in mind that due to social security agreements with different states, a different approach must be considered. The reason for this is that the German insurance periods may also partially be taken into account in the pension system of your home country. It should be noted that this does not mean that you will automatically receive a higher pension from the pension system in your home country, but only that you will reach the minimum insurance period in your home country earlier. Conversely, the insurance periods acquired in your home country may lead to the fact that you can also receive a pension in Germany, even if you have worked in Germany for less than five years.