The Importance of Awareness of the Old-age Pension System for Retirement Planning in Germany

On the other hand, they are unaware of the extent to which the demographics of German society are about to change, underestimating the respective life expectancies of men and women at age 65 by five years. An analysis of the 2023 survey of individuals conducted by the German Economic Institute (IW) shows that the greater the respondents’ knowledge on old-age provision, the more broadly based are their own plans for financing their retirement. For such planning, it is more important to understand the statutory pension insurance scheme than to be aware of the demographic transition. Those over 50 know more about old-age pension provision than the younger working population, though this topic is especially relevant for the latter group. Raising awareness of retirement plans among younger generations would help to stimulate investment in occupational and private pensions. The German Statutory Pension Insurance, the organisation responsible for the state pension scheme, already issues all contributors with a statement of their anticipated pension entitlements, and this, together with the planned digital pension overview, could be used to raise such awareness.