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Time of India
3 days ago
- Business
- Time of India
Retirement in Europe: How long will we have to work?
Representative image (AI) On May 22, the Danish parliament passed legislation raising the retirement age. The law, approved by 81 lawmakers with 21 voting against, sets the retirement age at 70 for all citizens born after December 31, 1970. Currently, the retirement age in Denmark is 67. By 2030, it will rise to 68, and by 2035 to 69. Last year, 47-year-old Social Democratic Prime Minister Mette Frederiksen stated that she would be open to reviewing the system once the official retirement age reached 70. International comparisons show just how differently retirement ages are regulated. In some countries, people continue to work even longer than they are legally required to. Will Germany follow Denmark's lead? Germany's new government is still trying to figure out how to deal with the country's struggling statutory pensions system. At a party convention of the ruling Christian Democratic Union (CDU) in Stuttgart recently, Germany's new chancellor, Friedrich Merz, praised himself and his Social Democratic coalition partner for having "written many good things into the coalition agreement" — the key issue of how to shore up the finances of the chronically underfunded pension system, however, isn't among them. Merz warned that "the way things are today can only last for a few more years at most." For Bernd Raffelhüschen, a former government economic advisor, the Danish reform effort is worth emulating. "We should raise the retirement age to 70 quickly so we can still catch at least part of the baby boomer generation," the economist told the Augsburger Allgemeine newspaper recently, referring to the large cohort of people born at the end of the 1950s and early 60s, who are currently retiring in huge numbers. Raffelhüschen said that because 1 million Germans will be leaving the workforce every year until 2035, this would push pension contributions higher for younger generations. Beveridge vs. Bismarck Pension financing in Europe follows two main models named after their founders: the Bismarck model, based on social legislation introduced by German Chancellor Otto von Bismarck in the 19th century, and the Beveridge model, developed in the 1940s. The Beveridge system is a welfare model that provides universal coverage and is tax-funded. It was devised by British economist William Henry Beveridge, a member of the UK Liberals' parliamentary faction. The Bismarck model, on the other hand, is an insurance-based system in which both workers and employers pay into a fund. In simplified terms, it's a so-called pay-as-you-go system where the working population finances the pensions of retirees through their contributions. This is why comparing pension systems across Europe is difficult — even more so as many countries use hybrid models combining aspects of both. The specifics, often complex, also vary widely between nations. Demographics, and the benefits of working longer — or shorter Germany's Bismarck-based system is increasingly under strain due to demographic changes. As the population ages and the workforce shrinks, there are more retirees and fewer people to fund the social insurance schemes. At the same time, people are living longer due to rising life expectancy, which means they draw pensions for more years. This puts mounting pressure on pay-as-you-go pension funds, with the result that either contributions must keep rising, or pension benefits may stagnate, failing to keep up with inflation. Alternatively, the overall pension level may have to drop Of course, a shorter working life and earlier retirement are appealing for most people as they can leave work before their physical capabilities decline and use the final third of their lives for meaningful activities or more time with family. There are also economic benefits, as more leisure time creates more opportunities to spend money, thus stimulating consumer demand and the broader economy. But working longer can also have advantages. Many people feel fit and engaged well into their 60s so that they may enjoy continuing to work, pass on their knowledge, and value interaction with younger colleagues. Employers benefit from retaining experienced staff and established routines, which may also help to mitigate the skilled labor shortage in Germany. Retiring a personal decision Looking at international statistics reveals that legal retirement age rarely aligns with when people actually stop working. In most cases, people retire earlier because their bodies can't keep up, or in creative professions, because of burnout. In a few countries like New Zealand, Japan, Sweden, or Greece, people often work beyond the official retirement age. Whether they do so voluntarily is unclear. The reasons are often too personal to be captured by statistics.\ The so-called gross replacement rate — the ratio of pension benefits to the final salary — plays a major role in people's decisions. If that gap is too wide, some workers can't afford to retire. The threat of old-age poverty could be reduced if pensions were high enough to provide financial security after a long career. But that would require money that the pension system currently lacks. On the other hand, raising contribution levels too much would limit workers' ability to save privately for retirement.
DW
5 days ago
- Business
- DW
Retirement in Europe: How long will we have to work? – DW – 05/28/2025
Beginning in 2040, Danes will not be eligible for retirement until they reach the age of 70. While European pension systems are difficult to compare directly, some fear this may signal a broader trend. On May 22, the Danish parliament passed legislation raising the retirement age. The law, approved by 81 lawmakers with 21 voting against, sets the retirement age at 70 for all citizens born after December 31, 1970. Currently, the retirement age in Denmark is 67. By 2030, it will rise to 68, and by 2035 to 69. Last year, 47-year-old Social Democratic Prime Minister Mette Frederiksen stated she would be open to reviewing the system once the official retirement age reached 70. In Denmark, more elderly people are returning to work To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video International comparisons show just how differently retirement ages are regulated. In some countries, people continue to work even longer than they are legally required to. Will Germany follow Denmark's lead? Germany's new government is still trying to figure out how to deal with the country's struggling statutory pensions system. At a party convention of the ruling Christian Democratic Union (CDU) in Stuttgart recently, Germany' new chancellor, Friedrich Merz, praised himself and his Social Democratic coalition partner for having "written many good things into the coalition agreement" — the key issue of how to shore up the finances of the chronically underfunded pension system, however, isn't among them. At least, Merz warned that "the way things are today can only last for a few more years at most." In Belgium, a recent attempt to introduce the age of 67 as retirement age was accompanied by nationwide protests Image: Yves Herman/REUTERS For Bernd Raffelhüschen, a former government economic advisor, the Danish reform effort is worth emulating. "We should raise the retirement age to 70 quickly so we can still catch at least part of the baby boomer generation," the economist told the Augsburger Allgemeine newspaper recently, referring to the strong cohort of people born at the end of the 1950s and early 60s, who are currently retiring in huge numbers. Raffelhüschen said that because one million Germans are leaving the workforce every year until 2035, this would push pension contributions higher for younger generations. Beveridge vs. Bismarck Pension financing in Europe follows two main models named after their founders: the Bismarck model, based on social legislation introduced by German Chancellor Otto von Bismarck in the 19th century, and the Beveridge model, developed in the 1940s. The Beveridge system is a welfare model that provides universal coverage and is tax-funded. It was devised by British economist William Henry Beveridge, a member of the UK Liberals' parliamentary faction. Bismarck introduced the German pension system which was a huge social achievement at his time Image: Portrait, Otto von Bismarck, Fürst von Bismarck, Holzschnitt, Reichskanzler The Bismarck model, on the other hand, is an insurance-based system in which both workers and employers pay into a fund. In simplified terms, it's a so-called pay-as-you-go system where the working population finances the pensions of retirees through their contributions. This is why comparing pension systems across Europe is difficult — even more so as many countries use hybrid models combining aspects of both. The specifics, often complex, also vary widely between nations. Demographics, and the benefits of working longer — or shorter Germany's Bismarck-based system is increasingly under strain due to demographic changes. As the population ages and the workforce shrinks, there are more retirees and fewer people to fund the social insurance schemes. At the same time, people are living longer due to rising life expectancy, which means they draw pensions for more years. This puts mounting pressure on pay-as-you-go pension funds, with the result that either contributions must keep rising, or pension benefits may stagnate, failing to keep up with inflation. Alternatively, the overall pension level may have to drop. Today, elderly people are healthier than in the past, thus living on pension payments much longer Image: Julian Stratenschulte/dpa/picture alliance Of course, a shorter working life and earlier retirement are appealing for most people as they can leave work before their physical capabilities decline and use the final third of their lives for meaningful activities or more time with family. There are also economic benefits, as more leisure time creates more opportunities to spend money, thus stimulating consumer demand and the broader economy. But working longer can also have advantages. Many people feel fit and engaged well into their 60s so that they may enjoy continuing to work, pass on their knowledge, and value interaction with younger colleagues. Employers benefit from retaining experienced staff and established routines, which may also help to mitigate the skilled labor shortage in Germany. Retiring a personal decision Looking at international statistics reveals that legal retirement age rarely aligns with when people actually stop working. In most cases, people retire earlier because their bodies can't keep up, or in creative professions, because of burnout. In a few countries like New Zealand, Japan, Sweden, or Greece, people often work beyond the official retirement age. Whether they do so voluntarily is unclear. The reasons are often too personal to be captured by statistics. Wealthy country, poor pensioners: Old age poverty in Germany To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The so-called gross replacement rate — the ratio of pension benefits to the final salary — plays a major role in people's decisions. If that gap is too wide, some workers can't afford to retire. The threat of old-age poverty could be reduced if pensions were high enough to provide financial security after a long career. But that would require money that the pension system currently lacks. On the other hand, raising contribution levels too much would limit workers' ability to save privately for retirement. This article was originally written in German.
Yahoo
5 days ago
- Business
- Yahoo
Zelensky arrives in Germany for talks with Merz amid Taurus missile speculation
President Volodymyr Zelensky arrived in Berlin on May 28 for talks with German Chancellor Friedrich Merz, as Germany seeks to project continued support for Kyiv in the face of Russian aggression. The two leaders will discuss Germany's military assistance and ceasefire efforts, a German government spokesperson said. Zelensky is also expected to meet with German President Frank-Walter Steinmeier. The visit comes amid renewed speculation of a potential delivery of Taurus missiles, Germany's cruise missiles capable of striking targets at a distance of 500 kilometers (300 miles). Before becoming chancellor, Merz, elected for the CDU/CSU conservative alliance, signaled he would overturn his predecessor, Social Democrat Olaf Scholz's, ban on delivering the missiles to Ukraine. Kyiv has called upon Germany to provide the weapons to be able to strike targets deep inside the Russian rear, while Scholz has ruled out the move due to fears of escalation. Merz is yet to greenlight the deliveries, as a change of policy on Taurus missiles has become a point of contention between the CDU/CSU and their Social Democratic (SPD) coalition partners. Adding to the confusion, the German chancellor declared earlier this week that Berlin and other Western partners have lifted all range restrictions on arms provided to Ukraine, which some saw as a signal of an incoming change of policy on Taurus missiles. Merz later clarified he was referring to a step made months ago, and German Vice Chancellor Lars Klingbeil confirmed that the new government has made no new decision in this regard. Earlier in May, the German government announced that it would no longer publish arms it had delivered to Ukraine, meaning that a potential supply of Taurus missiles may not be announced to the public. Speaking to journalists in Kyiv on May 27, Zelensky said he would discuss the issue of long-range arms for Ukraine with Merz, adding he has not heard any signals about a change in policy. Ukraine has previously received long-range missiles from the U.S., the U.K., and France — including ATACMS, Storm Shadow, and SCALP — but was initially permitted to deploy them only against Russian military forces in occupied Ukrainian territories. Only in late 2024, the Biden administration and other allies eased the restrictions, allowing Ukraine to use long-range missiles against Russian military targets on Russian territory. Germany has been Ukraine's leading military donor on the continent, and its support is even more crucial for Kyiv now as U.S. backing grows increasingly uncertain under President Donald Trump. Merz has repeatedly called for a united European response to unrelenting Russian aggression in Ukraine and pledged to impose tougher sanctions if Moscow continues to reject a ceasefire. Read also: If Germany sends Taurus missiles to Ukraine, Russia has a major Crimean Bridge problem We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Hindustan Times
6 days ago
- Business
- Hindustan Times
The New Retirement Age in Denmark Is 70
Liberals have long argued the U.S. should be more like Europe. If they mean Denmark, then yes, Washington can learn a thing or two about Social Security reform, given that neither political party in the U.S. has a serious plan to avoid a 21% cut to retiree benefits in less than a decade. Copenhagen raised its retirement age last week to 70 for Danes born in 1971 or later. Workers currently become eligible for the Danish equivalent of Social Security at age 67, which will go up steadily in coming years. This is the result of a reform passed in 2006 that ties the retirement age to average life expectancy at age 60. The typical longevity of retirees in developed economies long ago surpassed the estimates that were baked into government retirement programs when those entitlements were created. That's a blessing for individuals and families but a curse for government finances. Denmark is trying to ensure it can fund its program and keep the system solvent without imposing an ever-increasing fiscal burden on younger workers. Note that the latest bump in the retirement age was pushed through parliament by a center-left government, under Prime Minister Mette Frederiksen of the Social Democratic party. These changes always are controversial, and Ms. Frederiksen has suggested Denmark may eventually need to slow the pace of increases. There aren't politically easy answers, and people in physically demanding professions might struggle to work additional years in those same jobs. Yet there appears to be a cross-party agreement in Copenhagen that leaving the retirement age unchanged is reckless. Similar debates have become the norm in Europe in recent years. Sometimes governments move in reverse, as when Germany under Angela Merkel lowered the retirement age to 63 from 67 for some workers. But the general trend is that the age of eligibility rises alongside life expectancy. Even France raised its retirement to 64 from 62 under a reform pushed through by President Emmanuel Macron. As a reminder, the U.S. system of Social Security is projected to be insolvent in 2033, at which point the checks to retirees will suddenly be 21% smaller. Nobody wants this to happen, but nobody wants to take the heat for proposing real reform, so the U.S. keeps barreling toward a cliff while pretending not to notice. Denmark is a model by comparison. This is what it looks like when politicians are honest about a fiscally responsible retirement age in an era of modern medicine—and then have the courage to do something about it. Get 360° coverage—from daily headlines to 100 year archives.
Spectator
21-05-2025
- Politics
- Spectator
Remembering Patrick O'Flynn
The unanticipated and deeply sad news of Patrick O'Flynn's death is a blow to so many – not just to his close family but also to those in the world of politics and journalism and for many throughout the country. I first met Patrick in a pub with David Goodhart in 2018 and got to know him well in the following eight years throughout our – sometimes forlorn – efforts to revive the Social Democratic party. As a prominent and influential Eurosceptic political journalist – and Ukip MEP – we were delighted when Patrick joined us. I personally was thrilled. And since Patrick was better known and far more experienced than myself, naturally, I asked him to lead the party. Alas, Paddy was far too wise to accept, and when he returned from his stint in Brussels he sensibly concentrated on rebuilding his career as a political journalist – although he pluckily stood for the SDP in the 2019 Peterborough by-election and later chaired the party's London branch.
