Photo Gallery Despairing about the Golden Years
For decades, one of the certainties of life in Germany was that the next generation of retirees would be better off and live a more secure existence than the preceding one. It was viewed as a sign of economic success when Germany's senior citizens thronged the luxury decks of international cruise ships and were wooed by the advertising industry as an affluent consumer group. No other segment of the population currently has a lower risk of falling into poverty than pensioners.
But now even well-paid skilled workers and employees are afraid that this could change in the future. Ever since German Minister of Labor and Social Affairs Ursula von der Leyen (seen here) recently published alarming figures on the future level of German pensions, there has been widespread concern over the looming danger of old-age poverty.
These developments have deeply shaken Germans' belief that they can spend their golden years in prosperity. It used to be that Germans could be fairly certain that they would be better off in old age than during any other phase of their lives. Today, they have to worry that Germany will also experience conditions such as those in the US, where over one-fifth of the country's senior citizens live in poverty.
Retiree Maria Watt, 65, works to supplement her meager pension and make ends meet. Now that Germans are living longer, pensions also have to cover a longer period of time. Back in the 1960s, pensioners received retirement benefits for an average of 10 years. Today, a typical retirement lasts twice as long.
Roughly a decade ago, when Germany's pension reformers reduced the benefits of the statutory system, they hoped that workers would fill the resulting gaps in their pensions by investing in private retirement funds. But things often don't work out that way. Now many retirees must rely on basic social security, which supplements low pensions.
Pensioners protest old-age poverty in Hamburg: Back in 2007, the government pension agency published a study called "Old-Age Pensions in Germany," which is the largest evaluation of pension data ever conducted for Germans born between 1942 and 1961. The results were alarming. They clearly showed that old-age poverty is increasing.
Even private investments no longer pay off. "Money no longer multiplies on its own," says Andreas Beck, the founder of the Munich-based Institute for Asset Accumulation (IVA), an asset-management service provider. "The young generation is the big loser in this development."
Supposedly safe private retirement investments, such as life insurance policies with yields, are also no longer as attractive. Axel Kleinlein, the head of the Germany Insurance Holders Association (BdV) calculates that a 30-year-old man who signed a standard insurance contract in 1992 for 35 years, and has since then been paying into it 150 a month, could now only receive 87,500 when the policy matures -- even those it had originally held out the prospect of 199,000.
