Do small pensions make poor? - Germany’s €111 Billion Pension Overhaul Aims to Close Gender Gaps by 2040
Germany's pension system faces significant changes with the coalition's new package. Estimates suggest it will add €111 billion in costs by 2040. The plan aims to maintain the pension level at 48 percent until 2031 and boost the 'Mütterrente'.
Currently, the average gross monthly pension for men stands at just under €1,580, while women receive over €1,070. Around one in ten people get less than €300, with four percent of couples earning less than €500, despite having the highest average gross income of over €5,300 per month.
By 2024, the average gross pension is projected to reach around €1,500 for men and €1,000 for women. After a full working life, pensions are roughly €400 higher for both genders. The pension package aims to address these disparities and ensure stability.
The coalition's pension reforms seek to balance the system's financial sustainability with fairness. While the plan is costly, it targets improving pensions for both men and women, particularly through the 'Mütterrente' expansion. The success of these changes will be crucial for Germany's retirement landscape.
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