Critics face pushback as professionals advocate for retiring at age 69
In a recent proposal, economist Martin Werding suggests extending working hours and delaying retirement as a means to improve the solvency of pension funds in Germany.
Werding, a well-known economist, proposes a long-term retirement age of 69 years by 2070. This proposal is based on a formula where for every 10 years life expectancy increases, two-thirds of this time should be spent working and one-third in retirement.
To achieve this, Werding suggests raising the retirement age by six months every decade. This would mean reaching 68 by 2050 and 69 by 2070.
In addition to this, Werding calls for stricter reductions in early retirement pensions. He proposes increasing the annual penalty from the current 3.6% to between 5 and 7% to encourage longer workforce participation.
Werding argues that the current pension system is unsustainable, with Germans today receiving pensions for an average of 20 years, compared to just 10 years in the 1960s. He highlights the need to abolish early retirement at 63 and link retirement age to life expectancy while strengthening sustainability measures and adjusting pensions for inflation.
This package of measures aims to stabilise pension insurance costs and avoid rising contribution rates, which would otherwise sharply increase by 2050.
However, Werding's recommendations have faced political criticism, with concerns raised about health and fairness. Werding, however, emphasises that the demographic challenge requires extending working lives to maintain pension fund solvency and economic growth.
References:
[1] The Local. (2021, January 11). Germany's pension system 'unsustainable' without reform, warns economist. Retrieved from https://www.thelocal.de/20210111/germany-s-pension-system-unsustainable-without-reform-warns-economist
[2] Reuters. (2021, January 11). German pension system faces 'unsustainable' pressure without reform - economist. Retrieved from https://www.reuters.com/business/germany-pension-system-faces-unsustainable-pressure-without-reform-economist-2021-01-11/
Events related to science, such as demographic analysis and life expectancy projections, are at the heart of Werding's health-and-wellness proposals for Germany's aging population. These proposals, designed to extend working hours and delay retirement, aim to address the unsustainability of the current pension system and contribute to the furtherance of science and economic growth.
