What will America be like in 2036

Old-age poverty: one in five affected in 2036

The risk of old-age poverty increases. A study by the Bertelsmann Foundation warns that 20 percent of future retirees could be affected by 2036.

Single women, people without vocational training and the long-term unemployed are particularly at risk of being poor in old age. Overall, the risk of old-age poverty among future retirees will increase from 16 percent (2015) to 20 percent by 2036. For single women, the basic social security rate will even increase from 16 to almost 28 percent between 2015 and 2036.

This would mean that one in five new pensioners would be threatened with old-age poverty. Among the single women, it would even be one in three for whom the pension would hardly be enough to survive without financial support from the state. Pensioners who have a monthly net income of less than 958 euros are considered to be at risk of poverty.


The authors of the study see two main factors as the cause of growing poverty in old age: mini-jobs, long periods of unemployment and precarious employment in the low-wage sector. On the other hand, the level of pensions is falling continuously due to demographic developments and changes in pension law. The private old-age provision created to compensate for this would not have the desired effect. The authors of the study criticize that our pension system is not adequately prepared for people with atypical employment and low incomes. "We need further reforms for retirement: When the baby boomer generation retires, there could be a rude awakening," explains Aart De Geus, CEO of the Bertelsmann Foundation in the press release on the study. "In order to make the pension system future-proof, we have to adapt it today to the changed framework conditions in the world of work."


To stop the rise in old-age poverty, future pension reforms would have to focus more on the most vulnerable groups. "The current reform debates often ignore reality and hardly solve the underlying causes of poverty in old age," criticizes Christof Schiller, labor market expert at the Bertelsmann Foundation. "Discussions about a stabilization of the pension level do not help risk groups who can only live poorly on their salary during their professional years."

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