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The generation of retirees must follow new approaches to retirement planning

The generation of retirees must follow new approaches to retirement planning

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Many potential retirees no longer want to rely on statutory pension insurance. Instead, they invest in their pensions early.

MUNICH – The issue of pensions is once again playing a larger role among the general public, and not just in current debates. It appears that the future generation of retirees is increasingly interested in saving for their own retirement. However, the current budget crisis, where a traffic light government could also cut some pensions, seems less a cause than a side note.

However, the renewed debate could lead to more members of Generation Z thinking about their own pensions and increasingly seeing the need for action in private retirement saving.

‘Pensions won’t be enough’: Future retirees are taking new approaches to saving for retirement

While “economist” Victoria Grimm talks about cuts for pensioners after the budget freeze because “savings on pensions is possible”, it is clear that the future generation of retirees has opened new horizons for a long time. Not a bad idea if you believe the statements of Baden-Württemberg Finance Minister Daniel Bayaz (Alliance 90/Greens) that “pensions are not fixed”. Although Chancellor Olaf Scholz only recently commented on the cuts for pensioners in the Bundestag.

Be well in old age? Generation Z deals surprisingly extensively with the topics of retirement saving and their own pensions and opens up new horizons beyond statutory pension insurance. © Ralph Peters/Imago

It is clear that Generation Z in particular has not accepted the fact that their age group’s pension may be on shaky ground. Instead, future retirees also seem to be showing great interest in having their own pension, in addition to the company’s pension plan. “Young people are clear that state pensions will not be enough,” explains Swiss-Life’s head in Germany, Jörg Arnold, in an interview with The Sun. world. “Despite the rise in inflation, they are willing to provide additional money in particular. They are open to stocks, and the theme of sustainability also plays a role.

Future retirees invest early: Generation Z plans to retire and save for retirement

But it is not only current developments in Germany that are making Generation Z increasingly interested in retirement planning. A recent survey conducted in the United States confirms that the new generation of future pensioners – who always receive a relatively lenient assessment of their retirement planning – are starting to think about their pensions much earlier than expected.

In a survey conducted by the US CFA Institute, more than half of US Gen Z respondents said they were already investing their money – 82% of them even before the age of 21. Retirement planning also plays an important role for Generation Z. More than half of young people surveyed by the CFA Institute said they are investing so they can retire whenever they want.

Early retirement planning: Digital tools play an important role for the new generation of retirees

Overall, 66% of Gen Zers surveyed by the Transamerica Center for Retirement Studies said they had already started saving for retirement. On average, future generation U.S. retirees allocate about 20% of their annual income to retirement savings. According to the survey, their number is almost double the number of older generations.

The smart online banking generation is primarily using new financial instruments that make investing in promotions or ETFs easier. According to a CFA Institute analysis, 65 percent of Gen Z investors said they used investment apps to trade. This fact alone shows that despite the rise in pensions, the new generation of retirees no longer wants to rely entirely on statutory pension insurance. Instead, take your own retirement provisions into your own hands in the form of pension insurance, stocks or your own funds.