Population aging and pressure on public pension systems are transforming the European labor market. In Germany, thousands of reformed return to work, in a trend that the government itself encourages to ensure the sustainability of public accounts, according to the digital newspaper Notícias Labor.
The phrase “I am available and ready to work while the body holds on” summarizes the spirit of many Germans over 65. The phenomenon, which was timely, became increasingly frequent and begins to be seen as a key piece in response to a pension system under strong demographic and economic pressure.
According to Official Distustis data, in 2024 Germany reached a new job record with 46.1 million active people, even in a context of slowdown in the labor market. The contribution of immigrants was important, but also the growing number of retirees who decided to prolong the years of work.
More elderly in the job market
Between 2020 and 2023, the number of busy ages between 63 and 67 grew 26%from 1.31 to 1.67 million. At the same time, about 13% of the retired between 65 and 74 years remained work. For some, motivation is to maintain routines and social relations, but for four out of ten renovated salary is the main source of income.
The legal age of the reform is under the gradual climb and will reach 67 in 2031, following a model similar to that applied in Spain, where this limit will be reached in 2027. According to the same source, the measure is considered the “silent lever” that has helped to control system costs for over a decade.
On the other hand is a major renovation, known as Renentpaket II, which establishes that the value of public pension remains fixed in 48% of the average salary by at least 2039. At the same time, a capitalization fund is created that aims to alleviate the weight over taxpayers through financial income.
Incentives to prolong the career
Since May, with Friedrich Merz in government leadership, the message has become clearer: whoever can and wants to work longer. Measures were approved to reward voluntary reform postponement, approaching models already applied in other European countries, as referred to in the same source.
The logic is double: on the one hand, soothing the impact of mass exits of this generation, on the other, responding to the labor deficit that affects strategic sectors. At the same time, the executive seeks to create conditions for companies to see advantages in maintaining senior workers in their teams.
However, Bundesbank and the Organization for Economic Cooperation and Development (OECD) argue to go further, suggesting that the age of reform is adjusted to life expectancy and alerting to the risks of current early reform regimes.
Insufficient pensions for many
The guarantee that the public pension will be 48% of the average salary leaves Germany in an intermediate position compared to other OECD countries. The net replacement rate is around half of the latest net career salary, below more generous but above the most restrictive systems.
It is in this difference that many reformed are the need to complement income, either through paid work or private and occupational plans. This reality partly explains the increase in the participation of elderly in the labor market.
The weight of aging is also visible in the federal budget. According to the source mentioned above, the transfer of the state to the bottom of the pensions is already the largest rubric, prowling the 121 billion euros in 2025.
Still, the government provides to reduce the amount of state contributions in the coming years, which may translate into future climbs from contribution rates.
Social and economic challenges
The International Monetary Fund projects that the weight of pension and health expenses continue to increase over the next five years, requiring budget margin and new structural reforms. Without changes, the risk of imbalance of public accounts is high.
Economists, according to, warn that increasing the effective age of renovation to close to 70 can help the budget, but endangers work of demanding physical sectors. The absence of professional recycling measures or adaptation of jobs can lead to increased long -term unemployment between 60 and 70 years.
Future of work after the reform
The official discourse insists that “anyone who can and wants, must work longer.” The idea is to make this extension not only a need, but a choice supported by financial incentives and adjusted labor conditions.
However, the social response remains divided. If there are renovated who see in this option a way of staying active and integrated, others report that the pension system does not ensure a decent level of living after decades of discounts.
At the center of the debate is the issue that also begins to gain strength in other countries of the European Union, including Portugal: can current systems ensure the future of reforms without requiring thousands of elderly to return to the job market?
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