How much can I claim in early retirement benefits?

The calculation of your early retirement benefit rate is based on the 12 months with the highest pay in the past 24-month period. 

In order to receive the highest early retirement rate you must: 

  • have earned an average of at least DKK 23,371 per month for 12 months in the last 24-month period before your early retirement certificate is issued.
  • postpone your transition to early retirement for a certain period of time and have worked a certain amount of hours

For how long you will have to postpone early retirement in order to claim the highest rate depends on your year of birth. Read more below.

If you have not postponed early retirement long enough, you may receive a maximum of 91% of the highest rate.

You can read more about the early retirement scheme below, depending on when you were born:

You are eligible to take early retirement and retire from the labour market before the state pension age, but the timing and length of your early retirement depends on your age.  

Early retirement and state pension age

If you were born in the period

Earliest start of early retirement

Max number of years on early retirement benefits

State pension age

1 January 1956 – 30 June 1956

62½ years

4½ years

67 years

1 June 1956 – 31 December 1958

63 years

4 years

67 years

1 January 1959 – 30 June 1959

63½ years

3½ years

67 years

 
Early retirement certificate

When you reach the early retirement age and if you also meet the conditions for retiring early, you will be issued with an early retirement certificate from CA unemployment insurance fund. The certificate entitles you to retire early, even if you become sick later.

Postponement rule

The postponement rule is met if you postpone your early retirement for a period of time after the issue of the early retirement certificate and work a certain number of hours during this period. The length of the postponement and the number of hours required will depend on when you were born.

The postponement rule affects your early retirement benefit rate and your eligibility for the tax-free premium.

The postponement rule – these conditions must be met:

If you were born in the period

Minimum period you must wait before retiring early

Minimum number of hours you must work during the period

As full-time insured

Minimum number of hours you must work during the period

As part-time insured

1 January 1956 – 30 June 1956

1½ years

2,340 hours

1,872 hours

1 June 1956 – 31 December 1958

1 year

1,560 hours

1,248 hours

1 January 1959 – 30 June 1959

½ year

780 hours

624 hours

 
Early retirement benefit rate

If the postponement rule is met, your maximum early retirement benefit rate is 100% of the maximum benefits: DKK 232,212 a year.

If the postponement rule is not met, the maximum rate is 91% of the maximum benefits: DKK 211,308 a year.

Deductions for retirement pensions

6 months before your early retirement age, the pension companies will report the value of your pension plans to the unemployment insurance fund. They will also report any pensions which have been paid after your 60th birthday, but before your early retirement.

At Pensionsinfo you can see the funds accumulated in your Danish pension plans.

Deductions will be made in your early retirement benefits for your pension plans, regardless of whether the pensions will be paid out with the early retirement benefits.

  • If your pensions are not paid out with your early retirement benefits, or if they are paid out as a lump sum, the basis of the calculation will be 80% of the annual payout on your life-long pensions and 5% of the value of your other pension plans. Your early retirement benefits will be reduced by 80% of the calculation basis.
  • If, together with your early retirement benefits, you receive payouts under a pension plan which was set up in the course of an employment relationship, your early retirement benefits will be reduced by 64% of the pension payout. 

Your early retirement benefits will also be reduced if a pension is paid out after your 60th birthday, but before your early retirement.

Tax-free premium

If you postpone early retirement until you meet the postponement rule, you can earn a tax-free premium.

If so, you will be eligible for a tax-free premium for every 481 hours worked. Only work performed in the period after the postponement rule has been met will count towards the tax-free premium. If you retire early, you can only continue to earn this premium if you postpone early retirement until 2 years after you have received your early retirement certificate and had at least 3,120 hours of paid work (2,496 hours as part-time insured) during this period. You can earn a maximum of 12 premiums, totalling up to DKK 167,196 as full-time insured and up to DKK 111,468 as part-time insured. 

Senior jobs

If your benefits right ends 5 years before you reach the early retirement age, you will be entitled to a senior job until you are eligible for early retirement. A senior job is an extraordinary employment with your local municipality on normal pay and employment terms. 

Read more about senior jobs

Refund of early retirement payments

If, at some point, you decide to opt out of the early retirement scheme, the payments you have made into the scheme will instead be transferred to one of your pension plans and be taxable when your pension is paid out.

You are eligible to take early retirement and retire from the labour market before the state pension age, but the timing and length of your early retirement depends on your age.

Early retirement and state pension age

If you were born in the period

Earliest start of early retirement

Max number of years on early retirement benefits

State pension age

1 July 1959 – 31 December 1962

64 years

3 years

67 years

1 January 1963 – 31 December 1966

65 years

3 years

68 years

1 January 1967 – 31 December 1971

66 years

3 years

69 years

1 January 1972 – 31 December 1976

67 years

3 years

70 years

1 January 1977 or later

67½ years

3 years

70½ years

 

If you were born after 1962, your early retirement age will be adjusted according to life expectancy. The table shows the expected early retirement and state pension age.

Early retirement certificate

When you reach the early retirement age and if you also meet the conditions for retiring early, you will be issued with an early retirement certificate from CA. The certificate entitles you to retire early even if you become sick later.

The two-year rule

The two-year rule is a rule where you postpone early retirement for at least two years after the issue of the early retirement certificate and work 3,120 hours (as full-time insured) / 2,496 hours (as part-time insured) during this period. The postponement rule affects your eligibility for a tax-free premium.

Early retirement benefit rate

Your maximum early retirement benefit rate is 100% of the maximum benefits (DKK 232,212 a year).

Deductions for retirement pensions

6 months before your early retirement age, the pension companies will report the value of your pension plans to the unemployment insurance fund. They will also report any pensions which have been paid after your 60th birthday, but before your early retirement.

At Pensionsinfo you can see the funds accumulated in your Danish pension plans.

Deductions will be made in your early retirement benefits for your pension plans whether or not the pensions are paid out with the early retirement benefits.

  • If your pensions are not paid out with your early retirement benefits, or if they are paid out as a lump sum, the basis of the calculation will be 80% of the annual payout on your life-long pensions and 5% of the value of your other pension plans. Your early retirement benefits will be reduced by 80% of the calculation basis.
  • If, together with your early retirement benefits, you receive payouts under a pension plan which was set up in the course of an employment relationship, your early retirement benefits will be reduced by 64% of the pension payout. 

Your early retirement benefits will also be reduced if a pension is paid out after your 60th birthday, but before your early retirement.

Tax-free premium

If you postpone early retirement or decide not to take early retirement at all, you can earn a tax-free premium. You will be eligible for a tax-free premium for each 481 hours worked. If you take early retirement, you will no longer earn any premiums, unless you meet the two-year rule. You can earn a maximum of 12 premiums, totalling up to DKK 167,196, if you are full-time insured, and DKK 111,468, if you are part-time insured.

Senior jobs

If your benefits right ends 5 years before you reach the early retirement age, you will be entitled to a senior job until you are eligible for early retirement. A senior job is an extraordinary employment through your local municipality on normal pay and employment terms.

Read more about senior jobs

Refund of early retirement payments

If, at some point, you decide to opt out of the early retirement scheme, the payments you have made into the scheme will instead be transferred to one of your pension plans and be taxable when the pension is paid out.