Elderly demographic shift: tactics for women to narrow the retirement benefits disparity

Women in many parts of the world face a significant challenge when it comes to securing a comfortable pension at the end of their working lives. According to recent statistics, the statutory pension system contributes to the risk of old-age poverty for a large segment of the population, particularly women.

To be eligible for the old-age pension, individuals must have paid contributions into the pension insurance for at least five years, or prove substitute periods, and have exceeded the age limit, which is 67 years for those born in 1964 and later. It's important to note that this article focuses on the statutory pension system and does not discuss occupational pension programs.

The so-called standard old-age pension, which is what people usually refer to when discussing pensions, is determined by various factors. Despite gender not playing a direct role in the calculation, statistically, it makes a significant difference. In 2023, the average gross pension after 35 years of contributions was 1,809 euros for men, but only 1,394 euros for women.

This pension gap, or the difference between the last net salary and the pension, is a concern that the article aims to address. Here are some ways women can potentially reduce this gap:

Contribute for longer: By increasing the duration of contributions, women can potentially increase their pension. On average, men contribute for 41.6 years, while women contribute for 32.6 years. Extending the contribution period can help bridge the gap.
Maximise your contributions: Making the maximum allowable contributions can also help. The more you contribute, the more you stand to receive in the future.
Consider additional options: The statutory pension insurance offers various options, such as private insurances and securities, which can help supplement your pension.
Plan ahead: It's essential to start planning for retirement as early as possible. The more time you have to adjust your financial strategy, the better prepared you'll be.

It's also worth mentioning that the statutory pension system's revenues barely cover its expenditures, highlighting the urgent need for reform. The system has been a topic of debate for years, and it's crucial for individuals to understand how it affects them and what steps they can take to secure a comfortable retirement.

In conclusion, while the pension gap between men and women can seem daunting, there are steps women can take to potentially improve their retirement prospects. By understanding the factors that determine the amount of the old-age pension and the ways the system disadvantages women, women can make informed decisions about their financial future.