The Bundesbank proposes a long-term increase in the retirement age to almost 70 years. Specifically, in its current monthly report, it recommends that by 2070 the retirement age be gradually increased with increasing life expectancy. According to the Bundesbank proposal, born in 2001 would retire only in 2070 at the age of 69 years and four months.
Currently, it is planned that the statutory retirement age will increase to 67 years by 2031. The official forecasts for the pension will end in 2032. But life expectancy has continued to rise and is estimated to continue to increase in the future. An expert commission of the Federal Government should submit recommendations on the future of the pension by March 2020.
Retirement age is expected to rise for three quarters of a month each year
According to calculations by the Bundesbank, the rising life expectancy is putting the finances of the statutory pension insurance (GRV) under pressure. The monetary authorities therefore see a need for reform: "Otherwise, the expenditure will rise in the long term, much more than the revenue," they warn.
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The Bundesbank's proposal foresees that the statutory retirement age will increase by an average of three quarters of a month per year from 2032 onwards. Insured persons would then have to work longer in the future - and thus contribute more to the pension insurance. But they would also take longer pension.
Pension level still decreases, however
According to the Federal Reserve, the gradual increase in the retirement age would help to ensure that the pension level does not fall too far in the long term. This describes how much a standard pension is worth in comparison to a median income (read here why the concept is criticized).
Currently, the pension level is around 48 percent. According to the Bundesbank calculations, the retirement age would rise to around 43 percent by 2070 and stabilize at 44 percent. For comparison, without these changes, the pension level would shrink to around 40 per cent by 2070.
The Federal Ministry of Labor is currently planning a new pension calculation that could make the pension increase lower next year than originally planned.
