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: Battles over Bürgergeld, rolling the ‘die’ and carnival lingo

From the push to reform long-term unemployment benefits to the lingo you need to know as Carnival season kicks off, we look at the highlights of life in Germany.

Living in Germany: Battles over Bürgergeld, rolling the 'die' and carnival lingo

Deadlock looms as debates over Bürgergeld heat up 

Following a vote in the Bundestag on Thursday, the government’s planned reforms to long-term unemployment benefits are one step closer to becoming reality. Replacing the controversial Hartz IV system, Bürgergeld (or Citizens’ Allowance) is intended to be a fair bit easier on claimants.

Not only will the monthly payment be raised from €449 to €502, but jobseekers will also be given a grace period of two years before checks are carried out on the size of their apartment or savings of up to €60,000. The system will also move away from sanctions with a so-called “trust period” of six months, during which benefits won’t be docked at all – except in very extreme circumstances. 

Speaking in parliament, Labour Minister Hubertus Heil (SPD) said the spirit of the new system was “solidarity, trust and encouragement” and praised the fact that Bürgergeld would help people get back into the job market with funding for training and education. But not everyone is happy about the changes. In particular, politicians from the opposition CDU/CSU parties have responded with outrage at the move away from sanctions.

CDU leader Friedrich Merz has even branded the system a step towards “unconditional Basic Income” and argued that nobody will be incentivised to return to work. 

The CDU and CSU are now threatening to block the Bürgergeld legislation when it’s put to a vote in the Bundesrat on Monday. With the conservatives controlling most of the federal states – and thus most of the seats in the upper house – things could get interesting. Be sure to keep an eye out for our coverage in the coming weeks to see how the saga unfolds. 

Tweet of the week

When you first start learning German, picking the right article to use can truly be a roll of the “die” – so we’re entirely on board with this slightly unconventional way to decide whether you’re in a “der”, “die”, or “das” situation. (Warning: this may not improve your German.) 

Where is this?

Photo: picture alliance/dpa | Boris Roessler

Residents of Frankfurt am Main and the surrounding area will no doubt recognise this as the charming town of Kronberg, which is nestled at the foot of the Taunus mountains.

This atmospheric scene was snapped on Friday morning, when a drop in temperatures saw Kronberg and surrounding forests shrouded in autumnal fog.

After a decidedly warm start to November, the mercury is expected to drop into single digits over the weekend. 

Did you know?

November 11th marked the start of carnival season in Germany. But did you know that there’s a whole set of lingo to go along with the tradition? And it all depends on where you are. First of all, the celebration isn’t called the same thing everywhere. In the Rhineland, it’s usually called Karneval, while people in Bavaria or Saxony tend to call it Fasching. Those in Hesse and Saarland usually call it Fastnacht. 

And depending on where you are, there are different things to shout. The ‘fools call’ you’ll hear in Cologne is “Alaaf!” If you move away from Cologne, you’ll hear “Helau!” This is the traditional cry in the carnival strongholds of Düsseldorf and Mainz, as well as in some other German cities.

In the Swabian-Alemannic language region in the southwest of the country, people yell “Narri-Narro”, which means “I’m a fool, you’re a fool”. In Saarland at the French border, they shout “Alleh hopp!”, which is said to originate from the French language. 

Lastly, if someone offers you a Fastnachtskrapfe, say yes because it’s a jelly-filled carnival donut. And if you’re offered a Bützchen? It’s your call, but know that it’s a little kiss given to strangers!