Comments on: What are main differences between retiring in Germany and retiring in the United States? http://www.talkaboutretirement.net/personal-finance/what-are-main-differences-between-retiring-in-germany-and-retiring-in-the-united-states/ Issues concerns retirement and retired living Sat, 11 Feb 2012 21:58:42 +0000 http://wordpress.org/?v=2.6.3 By: Tahini Raving Weirdo http://www.talkaboutretirement.net/personal-finance/what-are-main-differences-between-retiring-in-germany-and-retiring-in-the-united-states/#comment-316 Tahini Raving Weirdo Wed, 25 Mar 2009 03:00:04 +0000 http://www.talkaboutretirement.net/personal-finance/what-are-main-differences-between-retiring-in-germany-and-retiring-in-the-united-states/#comment-316 In Germany, your contributions to the state pension plan (their alternative to the 401k plan) make up a certain deduction percentage of your salary. That percentage may well be the same as the one you currently pay in the US for the 401k plan. I would say the current German system has at least one advantage over the 401k plan: At the stage where, in the US, you may have run out of money late in life, the German state system would continue to pay you at the same rate. What do you do if you've got enough money to live to 90, and medical progress has made it possible for you to live to 110? We are talking far away, in a future which may be pretty amazingly long. There is one uncertainty though: Germany is one of the most aging countries in the world. By the time you'd be old, there would be so many others like you, percentagewise, that their financial well-being at current rates would be questionable. After all, the system works on contributions by those who are currently working. There is doom and gloom talk already with regards to that. Also, in order to benefit, you need to have paid in for a certain number of years - ideally 30 or more. In Germany, your contributions to the state pension plan (their alternative to the 401k plan) make up a certain deduction percentage of your salary. That percentage may well be the same as the one you currently pay in the US for the 401k plan.
I would say the current German system has at least one advantage over the 401k plan:

At the stage where, in the US, you may have run out of money late in life, the German state system would continue to pay you at the same rate. What do you do if you’ve got enough money to live to 90, and medical progress has made it possible for you to live to 110? We are talking far away, in a future which may be pretty amazingly long.

There is one uncertainty though:

Germany is one of the most aging countries in the world. By the time you’d be old, there would be so many others like you, percentagewise, that their financial well-being at current rates would be questionable. After all, the system works on contributions by those who are currently working. There is doom and gloom talk already with regards to that. Also, in order to benefit, you need to have paid in for a certain number of years - ideally 30 or more.

]]> By: shreck http://www.talkaboutretirement.net/personal-finance/what-are-main-differences-between-retiring-in-germany-and-retiring-in-the-united-states/#comment-315 shreck Wed, 25 Mar 2009 00:17:28 +0000 http://www.talkaboutretirement.net/personal-finance/what-are-main-differences-between-retiring-in-germany-and-retiring-in-the-united-states/#comment-315 I lived in Germany for about 5 years and can tell you that it is quite expensive to rent, buy fuel, groceries and so on but they also pay very well. I was over there in the early nineties and I do believe their min. wage was equivelent to about nine bucks an hour, then. They have great medical and a great banking system. The country is very crowded but friendly for the most part. I loved the fact that bicycling and train were the mainsource of transportation. There is a road to ausfart about every km.(Ha Ha) I loved Germany and plan to go back to visit one day. Good luck on your adventure. I lived in Germany for about 5 years and can tell you that it is quite expensive to rent, buy fuel, groceries and so on but they also pay very well. I was over there in the early nineties and I do believe their min. wage was equivelent to about nine bucks an hour, then. They have great medical and a great banking system. The country is very crowded but friendly for the most part. I loved the fact that bicycling and train were the mainsource of transportation. There is a road to ausfart about every km.(Ha Ha) I loved Germany and plan to go back to visit one day. Good luck on your adventure.

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