Back on 17 May 1889.....talks opened up in the German Reichstag over a federal pension idea....it passed a week later. At the time...the contribution rate was initially set to two percent of your salary, and the retirement age was 70.
Here we are135 years later, there's serious talk that entire system is heading toward failure, unless changes occur.
Age a part of the problem? Yeah. In the 1960s.....when you retired....you generally were lucky to live another 10 years. Today? The average time after retirement is 20.5 years more.
For every 100 folks putting money into the pot.....57 retired folks are receiving money out of the German pension fund. They figure by 2050....it'll be near 70 Germans getting a chunk out of the pension
Your current contribution (if you work)? 18.6-percent of your salary from you (your company pays a like-amount). By 2035, the experts say it'll have to be near 22.3-percent.
Paying out enough? Well....roughly one out of five Germans make less than 1,200 Euro a month on their pension.
This talk of a IRA-like system? It gets dragged up and discussed.....except for the FDP Party....the talk never goes anywhere.
Raising the work age another year or two? Almost every year....this gets serious chatter, then dissolves away (no one really wants to past 67).
So as screwed up as the American system is....the German system has just as many woes.
2 comments:
The problem is the boomers kept voting themselves more and more money from the pension to the rate that there's not enough people to pay for their greed.
I would agree with that assessment. But if you try to suggest living as a couple off 1,300 Euro a month in Germany....it won't work. Some German guys discovering Thailand/Philippines lifestyle, and the low pension would work there. Will be a crappy deal to retire in 2040 within Germany.
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