Germany increases retirement age to 67

I just saw this story on BBC News: German MPs raise retirement age.


Any thoughts? Good, bad or indifferent?

I guess if you have moved back to your homeland where its still 65 to retire that we can't claim our German pension until 67 either then?

i think it sucks. not every job and not everyone is fit enough to work at 67.

Or even in their forties

For how long has it been 65? Is there any process to adjust the normal retirement age for changing mortality? Can people under 67 collect an actuarially adjusted pension? The same thing was done in the US over 20 years ago and will likely happen again. Ought to be a regular adjustment. If people live longer, but don't work any longer, simple math tells you that the system will eventually go bankrupt.

This has been coming for some time - its a consequence of people living longer and
made worse in Germany by them starting to earn at a relatively late age.

Life expectancy has increased and so should the working life increase. Should have happened 30 years ago. Retirement age was set because of the expectations that about half wouldn't make it or die shortly thereafter. That hasn't been the case since the 60's and the widespread use of immunizations and promotion of clean water and hygenic food sources. To be honest, it should be more like 72. The problem is, the economy suffers because of the increased availability of workers. What is the happy medium? Answer that and every country will love you.

That part actually helps the situation and from experience I know that you need the experience before you are worthy. The unevenness of the situation now is the problem and in Germany the particular problem is the lack of experience in other areas of life. I will never ever hire anyone who has done the same thing forever. To me, they are simply blind to real world situations and lack the depth to ever contribute something in the short term.

Who the hell works till 65 in Germany, read somewhere that only 4% of Germans do that, so I don't think it will make much of a difference as least as long as companies try to get rid of anyone over age 50. A few years ago Deutshe Bank got rid pretty much anyone over age 50. than a few months latter went on a hiring binge to replace all the people lost.

To true - our next-door neighbour, a German teacher at a Berufsschule retired recently. Hes just over 60.
Could easily have carried on.

A good friend of mine - was at the Finanzamt - at 60 he took "Teilzeit" which means 6 mths at normal
pace and then hes off. Reasonably fit...


My previous employer basically took every opportunity to get rid of you once you reached 50.
My current one doesnt seem to be quite so bad but I dont know of many over 60s in the company
and we are in the IT world...

If you think that younger people have the needed experience to do the job correctly, then you are just as bad as the German system. Older people are more reliable, more experienced and actually take less sick time. I would easily own a Micky D's fully staffed by people over the age of 50 as opposed to one that is fully staffed by a bunch of snot nosed teenies.

The problem is that most companies in Germany still will only employee you until your 50th BD. Many contracts I've seen
state that they will terminate your employment in the year of your 50th BD. So what are people supposed to do between the
ages of 50-67?? I haven't seen any company in Germany hiring people over 40-45 (Unless there sen. mgmt positions)..

To the Avg. Joe Workforce this will truly suck..

Wow - I havn't seen that & luckily thats not in my contract!

I wonder if thats one of those things that isnt legal (of course if you come to fight that you have lost anyway).

EU directives are cracking down on the German system of only giving the young a chance. Well, at least on paper.

I've even seen employers specifying ages within job ad's here, you wouldn't get away with that in most western countries.

I wish they would scrap the state pension system and allow you to save for it yourself. I'm not suggesting you should just have that money to do with what you like, but that you could save it in a private pension fund. If you did that you could retire at whatever time you saw fit.

I'm sure we're not going to see half the money we pump into this system.

Hutcho, I agree. My other thought - why do they require pictures here with resumes. That only "encourages" age, gender, and sex descrimination - even if its subliminal. (He looks more responsible than the other guy.)

@PR: The HR people I work with (I teach business English) all say that photos are being quickly phased out because of the new anti-discrimination laws passed last August.

I don't really see the big deal about this. Another couple of years of work (if I have to!!) ain't gonna make much of a difference. If you're still fit and able, you should be allowed to work till whatever age you want. What else you gonna do? Gardening? 15 holidays a year? Read 4 newspapers instead of the usual 1? Learn how to knit, perhaps? Screw that!

As for pensions, I agree with Mr Hutcho. That's why I'm happy to remain a freelancer . Private pension will do me just fine. I'll probably claim that and do a bit of gardening and knitting for money on the side when I'm an old-timer!

The point isn't a few more yars of work. The point is that they will continue to take money from the pension plans. Personally I believe that for any government to make these changes to the pension system the people involved should have that effect their pensions, and everyone who has paid into the system should be grandfathered in. If the pension system can not be maintained due to increasing aging societies or decreased youths, the answer should not lie in the hope that more people will die off, but rather bringing money in from other sources. Also the life expectency has not grown, that is a common fallacy, it is just that more people are living to this expectency. There is a difference, the average age of the population increases, but the life expectency does not grow.

Of course you/we wont...

The life expectancy has risen dramatically. The common fallacy is people like you want to play games with statistics and semantics and deny the obvious.

Life_expectancy_1950-2005

Won't work. The rich would retire living fat and the poor would just become worse off. 1929 can happen again and probably will happen again and perhaps sooner than we would like.

Great graph. Did you sketch that yourself with crayons? I just need to stay away from any thread that has your inane posts in it (but that seems to be on everyone). I think your parents should have told you when you were young that if you want to pretend that you are intelligent, stay quiet, because with every word (or post) that you make, you show that the level of intelligence that you believe you have and your actual intelligence is quite far apart.

And your droll posts also state that we shouldn't even have to worry about retirement because we will all be dead from bir flu, that was to kill us all ummm ...last year or was it the year before that???

I thought about reporting your post, but your childish behavior would then be deleted. I will simply lump you into the group of people who can't grasp basic concepts and resort only to slag matches to back up your lack of intelligence and twisted views. Life expectancy has increased and attacking me will not prove you right no matter how much of a blowhard you are.

You want to know my opinion on this?
Sorry, i cant tell, i treasure my freedom and "Aufforderung zur Straftat" is illegal.

The point is not that you won't be able to work, the point is you cannot draw your pension that you have paid a fortune into all your life until you hit this age.

The biggest problem with the Social Security system is the misunderstanding of just what it is. What it is not is a retirement or pension plan. What it is is an insurance plan that gives basic benefits when you retire. Give or take a bit, that is basically the concept in most of the countries that have implemented such a mandated insurance plan.

The plan has become the defacto retirement plan for far too many people (everywhere) and that is one of the main reasons it no longer works as well as it should. These same attributes (people relying on mandated things as opposed to personal responsibility) are the main reason why totally scrapping the system would be a bad idea. It is obvious that the plan has not progressed over the years as it should have. In my mind, the progression should have been and should still be in the form of supplemental plans. In the states, the employee contributes 7.65% of their salary and the employer matches it. What I would like to see is that the employee can get income tax deferment by putting away up to 20% of their salary towards a pension plan and for every percent over 15.3% that the employee contributes towards a pension plan, the employer can reduce by the same amount their mandated contributions. This would promote business, promote savings, the economy and still guarantee a basic benefit.

Now the question is what should such pension plans look like? That is where the mess will come in. We know that totally private systems are not the answer and we know that playing the stock market looks great over the long haul, it is the short term ups and downs that prove difficult. It is not in the best interest of the system for everyone to retire early because the market is way up and stop contributing as that will just make the market come crashing back down. So, what to do? Perhaps bonds are the best investment, perhaps not. Tough one there.

Sorry, Eurovol, but you couldnt be more wrong. Atleast in Germany and the Scandinavian countries it was meant to be exactly that: a substitute for a personal retirement plan. It worked that way since Bismarck, the idea even survived two world wars.

The problem with personal retirement plans is that you are an individual at mercy of the financial development, which is completely out of your sphere of influence. As states cannot go bankrupt (Its them who make the money after all), they are a much better choice when it comes to guaranteeing your Pension.

The problem is that our social security was under a combined attack on all fronts from parties united by the interest to get their share from the potential mega market that a private pension system in one of the richest (by some key data the richest ) countries is.

The social security fund has been pillaged and raped by whoever was in power over the last 30 years, and of course the industry lobbies smugly rubbed their hands at that sight. Our money has been stolen, as simple as that. If we had had a working democracy, our social security system would still be working swell.

Of course, democracy isnt working as long as theres capitalism, the concept of a democratic political system while the economical system remains feudalistic is completely absurd and is only useful to make the masses comply with the wishes of their true masters. But i guess i got carried away here.

I agree with Pat. Here in Germany, the pension system is not to provide basic benefits, people rely on it fully here to provide them with money in their old age, and further to that I don't blame them when you have to put in 10% (and your employer another 10%) of your wage!

I am all up for a system like you describe and like they are trying to phase in in Australia which sets aside a small amount for people that have nothing when they retire. These people get a pension from the state to keep them going and this provides basic needs. You have to be means tested to get into this system. For anyone that wants to live in comfort/travel etc when they retire its time to start saving for yourself. I just wish the government here would let you do that.

Of course, its a tough ask for them to do it. The money we put into pensions now is mostly spent giving current retiree's their pension. There has to be one generation who pays for the old folks and for themselves. We'll probably be it actually, cause this system is going to break down when there is only half the number of people under 60 as over it, which will happen if the birth rate continues as it is.

I'm a little confused: Which country are you referring to here?

Germany. As indicated by the casual namedropping of a certain Bismarck dude.

The reunification, the 'homebringing' of russian germans are just two things that were paid largely out of the social security fonds but had absolutely nothing to do with it. Over the years, hundreds of billions of Mark and Euro have been misused for things that had nothing to do with the pensions of the people.

Not sure who has "pillaged and raped" the social security fund then, especially considering that it isn't actually a fund, but a pay-as-you-go-scheme...

(Edit: Concerning your Edit, I'm not sure if the Russian Aussiedler actually burdened the pension system, because their average age was young and they brought lots of kids. As for East Germany, true, that did burden the system, but that will continue only as long as the young East Germans earn less than their Western counterparts, because they too are paying into the system now. It's a pay-as-you-go-scheme, whatever is paid in in 2007 gets paid out to the pensioners of 2007. As long as there are old and young East Germans in a proportion similar to West Germany, and East Germans actually earn decent salaries (as opposed to being unemployed, which of course continues to be a problem), integrating them doesn't destroy the pension system)

the biggest blows were dealt by Helmut Kohl and his gang. And it doesnt matter one bit if its not a fund in the sense of the word, i was only looking for the closest translation. It doesnt matter because when you book certain expenses to one account, its completely egal whether or not theres billions resting in the account or if has to be filled up by later income. Your being robbed either way.

Yes, wealth was being transferred from West German pensioners to East German pensioners. And the effect is felt today, i.e. Western pensioners could draw a higher pension if it hadn't been for reunification. But for people drawing pensions in 2030 or 2040 or 2050, it won't matter much, because by that time, the East Germans that received pension entitlements in 1989 will to a large extent be dead already

You seem to be making a mistake: Just because its a pay-as-you-go scheme doesnt mean it cant be stolen from. Its not like there is no credit line on the account, you know? Just as it would have been possible to save up during the baby boomer years. The state used hundreds of billions from workers paying for pension insurance on other things then paying pensioners. That works with pay-as-you-go-scheme as well as with a fond, it doesnt matter.

Yes, of course I agree that money can be diverted from pay-as-you-go-schemes as well, and that can damage the viability of such a scheme. Not disagreeing with that. I guess all I'm trying to say is: The problem to fund a pay-as-you-go-system in 2030 and beyond when the population has aged dramatically is quite separate from whatever re-appropriation of pension funds that has occurred over the last 20 years or so. Even if none of this had happened, retirement age would still have to rise and/or benefits would have to come down dramatically.

BTW: Do you remember the hundreds billion Marks 'Haushaltsloch', conviniently discovered only shortly after the elections? Do you know who was Staatsekretär for finances at that time (and therefore the guy ultimately responsible for the oh so accidental oversight) ?

Genau. Horst Köhler. Der Horst Köhler. That small, all too human error certainly didnt hurt his career.

Sorry, confused again: Which Haushaltsloch (there's been many of those...), which election? (there's one every four years...)

Yeah, the term has become virulent. I meant the first one, when the term was made popular. 300 Million (sorry got that one confused) missing. Köhler was Staatsekretär under Waigel & Kohl, '90-94, the largest part of our federal deficit was made in those years.

To fill the 300M Haushaltsloch they raised taxes (which Kohl ruled flat out before the elections), invented the 'solidarbeitrag' and raised the petrol tax by 20 Pfennig per litre.

The Social Security system is still an insurance scheme where one generation funds the other. The German people save as well because they know that it is not a true "retirement plan" which tends to negate what you implied. Theory and reality are two very different things. One of the biggest problems here is that Germans don't spend enough at home. They go on vacation elsewhere and spend all the money there. That is why they have instituted other plans to get people to invest their money at home or buy additional insurance to supplement the so called "pension fund". Another problem is the risk aversion of the German people. They haven't until recently bought into the idea of investing in the stock market or funds as individuals and many still consider it gambling. That goes totally against the idea of growing up, saving your whole life for a house, getting a permanent position and retiring early so you can take vacations elsewhere and spend your money there.
Face it, the whole system is set up not to have kids because by the time you have that ability you are too old and not to risk starting a business because then you wouldn't get or have to leave that coveted permanent position. They also have very bizarre laws that discourages people from buying homes in the first place. Most of these laws are set up to minimize risk to the status quo.
If this country doesn't do some major economic and job development and soon, there will be a crisis that could lead to a depression that will expand beyond the borders. All these retirement and health reforms are not enough and are simply short term band-aids to a much larger and looming problem.

PS: Theo Waigel was on the board of the company I used to work for. The company went bankrupt. Will people never learn.

They should have had the courage to do this years ago.
Not only do I think it's an obvious step, I have no problem with it personally either.
But then I don't work in a physically demanding job.

Eurovol, you do point out some serious problems. I beg to differ on the causes, and i'd especially like to refute the notion your 'not enough' indicates tho.

I will keep this very short because i lack the time.

The problem is not that germany couldnt afford the traditional system of state pensions and social security. Germany is one of, maybe even the richest country in world. (i kid you not )
The problem is just that the state is broke. The reasons for that discrepancy lie in the way the state funds itself, or rather, does *not* fund itself. The big money is now in the hands of fewer people then it was in the 70ies and much fewer people then in the 50ies. The process is accelerating rapidly.
The Government will not touch these huge amounts of money, because the guys who control all the money control all the media. And of course the politic caste lives pretty well off the funding via supervisory board seats and consultant contracts.

So in effect, the Government did all it could to prevent its budget from growing along with the general wealth of the country, and we're beginning to really feel the results.

And just incase you haven't read this weekends newspapers.. When they signed the "67 year old" law into being, they wrote in a provision that
Politians can retire and get their pension at 55. Thus fucking over the commoner yet again... Did you know that they also get Tax free Gas, which
is why they don't care when they raise the Gas/Eco tax.. They don't pay it..

This is where in the US if that happened, there would be hell to pay. When I wrote Ude and Stoiber about the stupid laws governing me being able to buy my house, I got back a rather snotty letter from the local politician saying that I didn't have the right to contact them and talk to them the way I did. Fuck that. Politicians are nothing more than the representatives of the people and answerable to the people. It is time the people everywhere rise up and demand accountability.

Aye Aye

Couldn't agree more...

Politicians should serve the people and be completely answerable to them...

Have we all forgotten that life is actually for living and not really for working...

It's paper that is supposed to represent precious metals... It doesn't actually have any worth outside of that which we give it through consensus.

We should not be working 5-6 day weeks until the age of 67... WTF!

There is a better way but unfortunately it's not so favourable to those with big, greedy pockets to fill.

You don't have to work every day until 67, you just have to wait until 67 to draw your pension.

As far as I'm concerned you should have to work every day until you can't physically work anymore until you should expect the state to come in an support you. Of course, my opinion changes a bit when the government here forces you to save into their pension scheme, but in any case, if you want to retire before 67, you're welcome to. Just save for it yourself, and don't expect the state to bail you out.

I couldn't care less about these changes, I wish they'd actually reform the pension system itself instead though.

But this thing about politicians being able to retire at 55 is ridiculous. I don't think they should be able to vote for things for themselves. Anything that ploiticians want for themselves should go to a referendum and let the people decide if they deserve it.

Yeh, if this thing about 55 for politians is true, that's utter bullshit. Time for the newspapers to get onto that one.

Have you still got that letter? Why don't you post it here?!

I think you should have a certain amout of years that you must have worked - you cannot compare someone who left school at 16, and did physical work, with someone who left school at 20, studied for 10 years and then just sat in an office for the rest of his life.

Also, you're hard pressed to get a job in Germany if you're over 45 unless you're some senior business man. What are all the 'oldies' supposed to do? Also, what are all the young ones supposed to do if the old ones are blocking their jobs? With the unemployment being so high, this seems not thought out very well.

And i think the only reason to raise the age to 67 is that you're still made to retire earlier but the government won't have to pay you as much.