The beacon identifies the issue yet responds with an expensive and disheartening strategy.
The Golden Handshake for the Elderly is Looming. The Traffic Light Coalition Believes in Earning a Living Post-Retirement Age. On the Surface, This Seems Beneficial, But It's Far From Ideal. The Federal Government Should Look into the "Retirement at 63" Issue - Instead, They're Applying an Expensive Plaster.
The Baby Boomers are the culprits, according to studies. They hoard their savings and have a penchant for retiring early, which puts a strain on the shrinking contributors to the pension fund. Yet, they have the right to do so, considering the federal government under Angela Merkel introduced "retirement at 63" as a gift to the largest voting bloc. Those who have worked for 35 years can smoothly transition into retirement with minor deductions. Mallorca, not work.
The rationale behind it was the exhausting nature of jobs like care work and roofing, which often take a toll on individuals as they age. However, the German labor market is also home to age-appropriate office jobs. Meanwhile, the federal government is now doubting the wisdom of "retirement at 63." Well-meaning, perhaps, but out of touch with labor market needs.
A Costly and Ineffective Plaster
Regular employees take advantage of their retirement rights as well, given their basic comprehension of mathematics. But the federal government, true to form, reacts with its unique flare - a fire hose. Consequently, the cabinet has introduced the Delayed Retirement Bonus. In theory, it's not a terrible idea. Those who work past retirement age receive the missed pension as an instant bonus, along with the employer's social security payments as part of their salary. That's an 11% salary hike.
Those who enjoy their work and wish to continue working stand to benefit. In principle, that makes sense. However, the German Trade Union Confederation (DGB) vehemently opposes the billion-euro invasion of the pension funds. The distribution of funds to those with employment income fails to convince the trade unionists. Nonetheless, the federal government sends a conflicting message with the Delayed Retirement Bonus. Are we encouraged to work longer or retire early?
In all Honesty, an End to "Retirement at 63"
Admitting the irresponsibility of "retirement at 63" in the face of dramatic demographic change would be the honest approach. It's an unbearable burden for future generations. The employers' association advocates the abolition of "retirement at 63" in light of the skills shortage. Ex-Chancellor Angela Merkel prioritized elections over her political legacy.
Even the Traffic Light coalition avoids the courageous cut. Instead, they're slapping on a makeshift and expensive plaster to the wound of the skills shortage with the Delayed Retirement Bonus. That's not the sort of transformative signal for the German economic location that all three governing parties had promised.
Employment and social security are crucial factors in this discussion, as the federal government's introduction of "retirement at 63" has significant implications for the pension fund, leading to a potential shortage of contributors. Furthermore, the Delayed Retirement Bonus, while not a terrible idea in theory, could potentially confuse workers about when to retire, further complicating employment and social security matters.
