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Should Germany raise the retirement age to 69?

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

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

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.

READ ALSO: The 20 key stats that help explain Germany today

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.

READ ALSO: Old age poverty in Germany set to rise significantly

'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).

READ ALSO: How to maximize your German pension even if you plan to retire elsewhere

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.

READ ALSO: From climate action to 'Soli tax': What you need to know about Germany's planned changes

Member comments

  1. 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?!
    It is, indeed, an urgent matter, but I don’t think this is the answer.

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LIVING IN GERMANY

REVEALED: The most commonly asked questions about Germans and Germany

Ever wondered what the world is asking about Germany and the Germans? We looked at Google’s most searched results to find out – and help clear some of these queries up.

Oktoberfest
Hasan Salihamidzic, the sports director of FC Bayern, arrives with his wife at Oktoberfest in full traditional dress. Photo: picture alliance/dpa |

According to popular searches, Germany is the go-to place for good coffee and bread (although only if you like the hard kind) and the place to avoid if what you’re looking for is good food, good internet connection and low taxes. Of course, this is subjective; some people will travel long stretches to get a fresh, hot pretzel or a juicy Bratwurst, while others will take a hard pass.

When it comes to the question on the bad Internet – there is some truth to this. German is known for being behind other rich nations when it comes to connectivity. And from personal experience, the internet connection can seem a little medieval. The incoming German coalition government has, however, vowed to improve internet connectivity as part of their plans to modernise the country.

There are also frequent questions on learning the German language, and people pointing out that it is hard and complicated. This is probably due to the long compound words and its extensive grammar rules, however, as both English and German are Germanic languages with similar words in common, it’s not impossible to learn as an English-speaker.

Here’s a look at some of those questions…

Why is German called Deutsch? Whereas ‘German’ comes from the Latin, ‘Deutsch’ instead derives itself from the Indo-European root “þeudō”, meaning “people”. This slowly became “Deutsch” as we know it today. It can be a bit confusing to English-speakers, who are right to think it sounds a little more like “Dutch”, however the two languages do have the same roots which may explain it.

And why is Germany so boring? Again, probably a generalisation, especially given that Germany has a landmass of over 350,000 km² with areas ranging from high rise, industrial cities to traditional old town villages and even mountain ranges, so you’re sure to find a place that doesn’t bore you to tears.

Perhaps it is a question that comes from the stereotype that Germans are obsessed with strict about rules, organised and analytical. Or that they have no sense of humour – all of these things being not the most exciting traits. 

Either way, from my experience I can confirm that, even though there is truth to German society enjoying order and rules, the vast majority of people are not boring, and I’m sure if you come to Germany you’ll meet many interesting, funny and exciting people. 

READ ALSO: 12 mistakes foreigners make when moving to Germany

When it comes to the German weather, most people assume a cold and cloudy climate, however this isn’t entirely true. While the autumn and winter, especially in the north, comes with grey skies and sub-zero temperatures, Germany can have some beautiful summers, with temperatures frequently rising above 30C in some places.

Unsurprisingly, the power and wealth of the German nation is mentioned – Germany is the largest economy in Europe after all, with a GDP of 3.8 trillion dollars. This could be due to strong industry sectors in the country, including vehicle constructions (I was a little surprised to find no questions posed on German cars), chemical and electrical industry and engineering. There are also many strong economic cities in Germany, most notably Munich, Frankfurt am Main and Hamburg.

READ ALSO: Eight unique words and phrases that tell us something about Germany

Smart and tall?

Why are Germans so tall? They are indeed taller than many other nations, with the average German measuring a good 172.87cm (or 5 feet 8.06 inches), however this may be a question better posed to the Dutch, who make up the tallest people in the world.

Why are Germans so smart? While this is again a generalisation – as individuals have different levels of intelligence in all countries – this question may stem from Germany’s free higher education system or their seemingly efficient work ethic. Plus there does seem to be some scientific research behind this question, with a study done in 2006 finding that Germans had the highest IQ in Europe.

So, while many of the questions posed about Germany and Germans on Google stem from stereotypes, we can confirm that some aren’t entirely made up. If you’re looking to debunk some frequently asked questions about France and the French, check out this article by our sister site HERE.

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