Expert Supports Minister Reiche's Proposal for Longer Working Life

Berlin - Katherina Reiche's proposal to extend the working age in Germany has sparked intense discussions among policymakers and the public. The Federal Minister of Economics has emphasized the need to eliminate incentives for early retirement and instead encourage individuals to work longer. This stance has received backing from renowned pension expert Professor Bernd Raffelhüschen.

In a recent statement, Reiche highlighted the necessity of reforming the retirement system to align with increased life expectancy. She pointed out that the time has come to create motivations for individuals to delay their retirement.

Professor Raffelhüschen, a prominent figure in the field of pension economics, has voiced his agreement with Reiche's initiative. He has articulated that the move is not only timely but also equitable for future generations. According to him, Germany has neglected to adjust the retirement age to reflect the significant rise in life expectancy over the past decades, which he identifies as a critical oversight.

Raffelhüschen elaborated on the implications of the current retirement system. He noted that individuals retiring in the 1960s and 1970s generally received pension benefits for about ten to eleven years after working for 45 years. This translates to a ratio of 4.5 years of work for every year of retirement benefits received. In contrast, those retiring today, after approximately 40 years of service, often enjoy pensions for over twenty years, resulting in a much lower work-to-benefit ratio of about two years of work for each year of retirement.

The pension expert suggests that if the retirement age were adjusted to reflect current life expectancy trends, it would already be set between 68 and 69 years. Thus, he views the proposal by Minister Reiche to raise the retirement age as a valuable contribution towards maintaining the sustainability of the pension system. Raffelhüschen expressed concern that the ruling CDU/CSU party is hesitant to endorse such changes due to fears of breaking election promises, which has led to their cautious stance.

Professor Raffelhüschen, who holds a professorship in financial science at the University of Freiburg and serves on the board of the 'Stiftung Marktwirtschaft', has dedicated his career to researching the sustainability of social security systems and the economic implications of demographic changes.