The Ifo Institute condemns the German government's pension policy as "fatal."
The Ifo Institute criticizes the federal government for their "fatal pension policy." With the demographic pressure in mind, the current pension rate of 48 percent and the elimination of the sustainability aspect is unrealistic, noted Ifo researcher Niklas Potrafke in Munich. "As more and more young people take care of fewer and fewer elderly, pensions need to increase at a much slower rate in Germany."
The government's pension plan requires additional tax subsidies for pension funds, which are essential for investments in infrastructure, education, and defense. On the other hand, what's really needed is an adjustment of the retirement age to match life expectancy.
As the population continues to age, the retirement age must also be pushed back. The public and politicians have been ignoring these realities for quite some time.
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The Ifo Institute calls for a revision of the German government's pension reform, finding it unsustainable. Amidst the need for pension funds to invest in crucial sectors like infrastructure, education, and defense, the federal government's current pension policy with its reliance on tax subsidies and fixed retirement age is considered inadequate.
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