Retirement Age in Germany Could Be Raised From 65 to 69
Bundesbank, Germany's Central Bank, reported on Monday that low fertility rates, longer life spans, and fewer workers could force Germans to work beyond the legal age of retirement at 65 or else Germany's pension funds will face serious headwinds fulfilling its fiduciary duties to its pensioners in the next couple of decades.
Rapidly Aging Workforce
The German government is faced with the challenge of shouldering massive expenses to its rapidly growing elderly population as Germans live longer and fewer young people replace them in the workplace.
Work Longer to Increase Savings
Bundesbank proposed that Germans must remain productive and active in the workplace until 69 years old to increase their savings and pension payments to sustain the stability of Germany's pension fund.
Bundesbank states that Germany's pension funds are currently robust and stable but, a drastic drop in pension payments is expected if workers retire by 65 because the government's pension funds might not have enough cash to sustain retired workers who could live 20 more years.
Second Oldest Population In The World
Germany's median age stands at 44 years old making it the second oldest nation in the world according to a 2015 report of Germany's Federal Institute for Population Research.
Retirement Age from 65 to 67 to 69
The government of Germany has already set to increase the retirement age from 65 to 67 by year 2030. However, Bundesbank is requesting to forego that because the bank is convinced that a two year increase in the retirement age will not bring in enough pension savings to replenish Germany's pension funds beyond year 2050.
However, the German government is averse to the proposal. Steffen Seibert, the German government's spokesman said that the retirement age of 67 is not only fair, but also necessary given the trajectory of Germany's demographic growth.
