Should Germany raise the retirement age to 69?

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Should Germany raise the retirement age to 69?
Should the retirement age go up to 69 in Germany? Photo: DPA

As people live longer, Germany’s Federal Bank is pushing to raise the retirement age to at least 69.


Germany's statutory pension funds will come under considerable pressure in the future due to increased life expectancy, the Bundesbank stated in its report for October 2019.

To tackle this, the bank has proposed a long-term increase of the retirement age in Germany to just over 69 years.

"Due to demographic developments, the pay-as-you-go statutory pension insurance will come under considerable pressure in the future, especially from the mid-2020s," the central bank stated in its October monthly report, Zeit wrote on Tuesday.

Currently, the official pension age for women and men in Germany is 65, but that is gradually increasing to 67 over a transition period up until 2031.

The life expectancy in Germany as of 2019 is 81.2 years. For women that figure stands at 83.6 years and for men at 78.8.

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According to experts, however, the current pension age is not sustainable. Once the baby boomer generation has retired, fewer new workers will be there to fill the gaps and that means fewer contributors into the social security system.

In order to keep the system stable, there is "a need to adjust the key parameters of the pension insurance system," write the economists at the Bundesbank. An important starting point for further reforms is the retirement age, they say.

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'Raising the retirement age with increasing life expectancy'

The Bundesbank therefore suggests raising the retirement age to 69 years and four months by 2070. International organizations such as the EU Commission, the IMF and the OECD have also suggested "raising the retirement age further with increasing life expectancy,” the report states.

Under the Bundesbank's proposal, those born in 2001 would only get to retire in 2070 at the age of 69 and four months. 

This adjustment would not only relieve the burden on the pension fund, the central bank argued, but "it would also strengthen the overall economic potential by increasing employment and therefore supporting the assessment bases for taxes and social contributions".

However, the proposal has been met with some criticism, especially from the centre-left Social Democrats, the Greens and Die Linke (The Left).

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What to know about retirement in Germany

The retirement age in Germany is 65 for people born before 1947 and 67 for those born after 1964. But for anyone born between 1947 and 1964, things are a little more complicated.

Due to a law passed in 2007, people born in 1947 can still retire at 65, but for every year after that until 1958, the retirement age increases by one month. For example, those born in 1948 can retire at 65 plus one month, while those born in 1949 can retire at 65 plus two months and so on.

Then for those born after 1958, the retirement age increases by two months each subsequent year until it reaches 67 for people born in 1964 and after.

The amount you must contribute towards your state German pension, through social security contributions, is calculated on your annual salary, which is automatically deducted by your employer and paid along with the same amount paid by the employer to make a 50:50 contribution from both parties.

The maximum contribution in 2018 was 19.5 percent of gross salary (9.75 percent by employee and 9.75 percent by employer). This is set to rise to 20 percent by 2025.

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Comments (1)

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Anonymous 2020/02/05 09:59
I understand the gentrification is a big problem, but let's face it: how many of the old people will be functional and not be a burden for the workplace at 69?!<br />It is, indeed, an urgent matter, but I don't think this is the answer.

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