Germans become more optimistic about retirement finances as they age
Spending expectations of workers during retirement roughly matches the spending reality of retirees
The only certainty about the pension system is change
Change. That is all we know for sure about the future of Germany’s pension system following the new regulations on occupational pensions, known as the Betriebsrentenstärkungsgesetz (BRSG) enacted in 2017.
In the midst of this, how can we build trust to create happier retirees? To find out, we sought the views of workers and retirees about their journey to and through retirement.
Here are two key findings from our 2018 Global Retirement Reality Report survey, focusing on how the expectations of German workers saving for retirement compare to the realities of thosealready in retirement.
Optimism about one’s financial situation in retirement increases with age
In Germany, only 12% of the working population is optimistic about their retirement finances, but this improves with age. For those later in retirement, more than three-tenths are optimistic. This progressive improvement is a common finding across the eight countries surveyed.
Saving for a rainy day is high on the priority list
After paying for regular essentials and going on holidays, saving for a rainy day came next on the list of where workers expect to spend their retirement savings, possibly a function of the sense of unknown that accompanies the looming reforms. Indeed, this priority to save was higher for German workers than for pre-retirees from every other country surveyed.
The spending expectations of workers roughly match the experience of retirees, with the priority list being very similar between them.
What does the changing pension system mean for sponsors, schemes and the wider industry when helping members to achieve better retirement outcomes? We will get a better understanding of that as the system matures.
This document contains certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Investing involves risk, including the risk of loss of principal. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
Diversification does not ensure a profit or guarantee against loss.
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
Images of NYSE Group, Inc. are used with permission of NYSE Group, Inc. Neither NYSE Group, Inc. nor its affiliated companies sponsor, approve of or endorse the contents of this program. Neither NYSE Group, Inc. nor its affiliated companies recommend or make any representation as to possible benefits from any securities or investments.