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German seniors lose buying power
Published: 13 Oct 12 12:07 CET | Print version
Online: http://www.thelocal.de/national/20121013-45539.html
Senior citizens in Germany have seen a fifth of their buying power disappear since 2000, with the elderly in the former East Germany losing the most, new data shows.
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Left party co-chair Bernd Riexinger criticized the government over the figures, and said the “downward spiral in pensions” must be stopped. He added that in eastern Germany, more than anywhere, there is an “avalanche” of old age poverty on the horizon.
The average pension payments, after deductions, in western Germany are €1,062 (up €17 since 2000), in eastern Germany the figure is €1,047 – a drop of €23 since 2000, the paper reported. Over the same period, the consumer price index rose about 20 percent.
More seniors in Germany are continuing to work into their old age. In 2000, 280,000 pensioners had €400-a-month jobs, which are exempt from taxes and national insurance contributions.
This figure has risen to about 761,000, the daily Süddeutsche Zeitung reported last month. Of those, 120,000 were 75 and older, the newspaper said.
Critics views those statistics with alarm, arguing that the seniors are not staying in the workforce because they want to, but because they can't live off their pensions.
The issue of pension reform has recently pitted Labour Minister Ursula von der Leyen against younger members of her Christian Democratic Union (CDU) and its coalition partner, the Free Democratic Party (FDP).
Von der Leyen supports supplements to raise the current basic pension of €688 per month to €850. In a letter to her party's junior members, she said: "At stake is nothing less than the legitimacy of the pension system for the younger generation."
FDP leader Philipp Rösler told the Welt am Sonntag newspaper last month that the plan would "cost millions. We do not have the money for that in the pension fund."
Young members of the FDP and CDU are promoting more private pension savings for low income earners.
The government has proposed reducing pension contributions from 19.6 to 19 percent by the end of the year, but the proposal has stalled in the Bundesrat, or upper house of parliament, where members refused to take a stand on the issue, the daily Die Welt reported Saturday.
The Local/mbw
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Your comments about this article:
I would like to hear what Chris tea think...
Not starving old people trying to keep the wolf from the door.
"Young members of the FDP and CDU are promoting more private pension savings for low income earners."
Then young members are self centered idiots with no grasp of the real world so don't forget what the future would hold if they retain power next year.
State pensions schemes? I never trusted them in any country I lived in. At the fast pace the world changes, how can I rely on amounts to be paid by the ones working in 20 years (the pay-as-you-go system)? Or should I trust large financial corporations managing a funded plan? Pardon me, but I cannot do that. So I treat my contributions to pension schemes as "compulsory donations", which may come back at a certain time, but not necessarily and not at a similar value.
The good thing for me is that I do not actually plan to retire. I will not be able to keep my work capacity at 100% forever, but I do not see a reason to stop working as I pretty much enjoy it. It is not the muscles that I am relying upon to bring added value. I have a modest life style, so I do not need much money, and even working much less hours will do it. Anyway, some financial security is provided by the small real estate investments I made. My real peace of mind comes from investing in my health (mostly time) and my abilities.
"articles against your propaganda" - Oh, well, you took me again for another person. It's nothing new and guess it will happen again.
Unfortunately, it is not you who decides retirement, it is the highly competitive marketplace. Age discrimination is the result of experience vs cost, latest technology vs last year's, flexibility vs rigidity, a long vs short future, company retirement policies. Unless you have a particular skill (which may not be so particular years from now), you'll get shunned from the workplace like everyone else.
I may be wrong but i think you will find he is self-employed ,but be careful Mr. Rea as pride comes before a fall particularly where heath is concerned.I hope I'm wrong on the last part as I wish you no ill .
And re work, as already mentioned by our friends, the issue is not working longer, the issue is if u will still be able to have a job that u like when u get 55.. I work for a huge Enterprise in Munich,and I tell u I am not confident I will.. And I won't be happy to do a 400 euros job am 100% sure.. 400 euro job concept, another example of wrong German agenda..
Inflation tax happens when more and more money is being created (spent) on bailing out banks, other countries or providing stimulus packages. The creation of this new money dilutes the existing pool of money and thus one needs more of it to purchase the same physical good.
Say NO to the creation of new money. Say NO to the ECB bailing out countries and purchasing their government bonds with new money they create out of thin air.
You are of course also right about health. But if I will ever be so sick that I would not be able to work anymore, I will probably not enjoy life anyway. So I will actually not need to work to earn a living :)