Friday, April 22, 2016

The German Debate Over Retirement

There's a fair sized debate underway currently in Germany....over what some see as four different fields of thought.

The right retirement age?  63, 65, 67, or 70?

Before you run off to hear the German pitches for the various age need to start with one simple fact.....they are running out of pension funds.  The current population of eighty-one million will slide (unless immigration saves the day or delays the day) around 65 to 67 million within the next twenty-five years.  No one argues against this point's agreed upon by the government, university studies, and private foundations.

If they could hold the population to the eighty-one million level, we probably wouldn't be having this discussion on the age situation.

Presently, most Germans who might retire in the five to ten years....will do it at the 65-year point.  Those around age 50 now.....will have to work until 67.  The finance guys who control the pension program would like to make the new retirement in twenty years....70 year old.  Meanwhile, about half the German population would like to retire around age 62 or 63 years old.

German healthcare figures into this mess because they do a good job of extending a guy's life. the point there he is still around active at age seventy. It doesn't mean he can still work at the butcher shop, or mix concrete, or hang wallpaper.  The budget people simply think that seventy is the new 65.

What kind of employment exists in Germany for a guy who is sixty-five and needs five more years before retirement?  It's hard to find any HR guy who'd go and recruit for someone in this age group.  I watched a documentary piece last year where a guy in the Hessen area....around age 65....went looking for work.  Ten potential jobs.....ten episodes where he was turned down.

What some Germans have pointed out is that some professions are simply impossible for people to make it much past carpenters, roofers, concrete guys, or anything involving physical stamina.  These are the people suggested for early retirement.

Where this is going?  I would suggest that some major financial emergency will occur within a decade and reality will be admitted by several political parties that they have a pension program that can't survive.  You will either have to work five more years (which might be impossible to imagine), or take a twenty-percent cut on your pension (something which is also hard to imagine).  The public frustration will be difficult to devise some fix or repair to the system.

Oddly, it's the same scenario that most Americans face.

1 comment:

Claudia said...

It is getting to the point that the private pension are being eliminated. The only ones who will have pension will be the people who are government employees.

The people who don't have pensions will be supporting those who still do.