Employment shortly before and after retirement

Over the same period, the number of people who will potentially take up employment in mechanical engineering is significantly lower at around 118,000. This results in a purely mathematical balance of 178,000 people who could be missing from the industry in the coming years.

The labour force participation of 60 to 64-year-olds has increased more in recent decades than in any other age group. After reaching the age of 65, however, the proportion of people in employment is significantly lower. The results of the IW Employee Survey 2024 show how deeply rooted the idea of early retirement is in Germany: one in four people do not feel able to work until the statutory retirement age. The proportion of those who would like to take an early retirement is even around a third.

The individual decision on when to retire is based on a trade-off between money and leisure time - regardless of the social challenge and possible welfare losses coming along with the declining labour supply. However, the feeling of having achieved enough in life is also closely linked to the desire for early retirement. Here, politicians, the social partners and entrepreneurs are called upon to counteract the narrative that declares retirement after a certain number of years of employment as the (untouchable) merit of a lifetime's work and thus counteracts any efforts to increase employment in old age.

Awareness of the demographic change and insights into individual retirement preferences lead to the question of how people can be motivated to remain in the labour market for longer. In addition, approaches are needed to facilitate the continued employment and re-employment of retirees in companies. The survey results indicate that at least around 36 per cent of employees can imagine working beyond the statutory retirement age. According to figures from the IW Personnel Panel from the summer of 2024, a good half of companies in Germany now employ at least one employee who has reached the statutory retirement age or is already drawing a pension. However, just under four in ten companies see serious labour and social law issues, even though they already have experience of employing silver workers in the past or are currently doing so. However, the extension of working life is important to stabilise labour supply and the social security system. Therefore, the study derives the urgently needed changes in social and labour law.