Initiative Neue Soziale Marktwirtschaft (INSM)
2023
Retiring at 63 is very popular. Since July 2014, people who have paid into the statutory pension insurance scheme for at least 45 years can retire at the age of 63 on a full pension. In 2021, around 30 percent of new pensioners took advantage of this opportunity. Prognos’ short study shows the consequences of retirement at 63 and investigates what would happen if this pension for the particularly long-insured persons, was abolished.
First, we analysed the impact of past pension reforms on the participation of older people in the labour market. We also estimated the effect of pensions at 63 on the labour market in the period from 2014 to 2022.
In the next step, we calculated the impacts that abolishing pensions at 63 would have on the long-term financial development of statutory pension insurance and the labour market. We simulated the consequences for pension finances with our social security model, OCCUR. We examined two scenarios: on the one hand, the immediate implementation of pension at 67 without exceptions from January 2024, and on the other, the gradual abolition of the exemptions for particularly long-term insured persons by 2031. The legal status quo is used as a reference scenario.
The pension level currently stands at 48.1 percent of last gross income and will fall significantly in the coming years. Politicians are faced with the difficult task of closing the gap, which is in light of demographic change, is becoming increasingly difficult. Other measures to reduce them include:
Study: Pension with 63 – Quo vadis? (PDF in German)
Social contributions in focus (in German)
Pension needs over time (in German)
Reliable intergenerational contract (in German) The future of statutory pension insurance (in German)
Inclusion of civil servants in statutory pension insurance (in German)
Effects of the statutory minimum wage on pension development (in German)
Florian von Hennet Press Officer Initiative Neue Soziale Marktwirtschaft INSM Tel.: 030-27877 174 Email: hennet@insm.de
Dr Stefan Moog (Project Manager) Phone: +49 761 7661164-812 Email: stefan.moog@prognos.com
Project team: Dr Stefan Moog, Dr Oliver Ehrentraut, Leilah Dismond
Last update: 30.05.2023
Senior Expert
Partner, Director, Head of Economics Division
Consultant
72 billion hours: That is how many unpaid care work hours are performed in Germany, annually, by women. In a new paper, we show the value of unpaid care work and how unevenly it is dis-tributed between men and women.
Where in Germany is retirement particularly cheap and where has it become more expensive than average? Prognos examined this for the German Insurance Industry Association.
In a comprehensive study, Prognos analyses the social and economic situation of freelance and hybrid working creatives. The results will serve as a basis for targeted improvements.
Calculations on inflation-related additional private household expenditure and the work of the Federal Government's relief package.
Study compares “boomers” and Generation Z: high need for security for young and old alike.
Corona tests are designed to help reduce the incidence of infection. Prognos has now quantified the benefits of testing on the economy and health care.
Due to demographic aging in Germany, social security contributions will rise to 46% by 2040. These were the findings of our calculations for the INSM.
If German economic productivity increases, not every individual benefits to the same extent. These are the results of our study commissioned by the Bertelsmann Stiftung.
Does the statutory minimum wage have an influence on pension development and individual pension entitlements? Prognos investigated this on behalf of the Minimum Wage Commission.
For the Robert Bosch Foundation, Prognos conducted a workshop with integration stakeholders from districts, municipalities, and cities.
Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.