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The Development of the Pension Gap and German Household's Behavior

71 Pages Posted: 14 Dec 2016  

Axel H. Börsch-Supan

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Tabea Bucher-Koenen

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Irene Ferrari

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Vesile Kutlu-Koc

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Johannes Rausch

Max Planck Society for the Advancement of the Sciences

Date Written: October 31, 2016

Abstract

The MEA-study deals with the future development of the so-called pension gap. Firstly, simulations are carried out under different assumptions on the example of the standard pensioner. Secondly, the MEA study examines the savings behavior of German households and the individual ways to close the pension gap, using the representative data SAVE (Saving and Retirement in Germany) and SHARE-RV, the German sub-sample of the Survey of Health Ageing and Retirement in Europe developed in cooperation with the Gesetzliche Rentenversicherung. The standard projections and calculations with budget data clearly show that a funded supplementary pension can cushion the fall of the state pension to some extent: Over the half of all households are secured in a way that they can fill the pension gap even with a prolonged low interest rate. Through the current low interest rates, however, it is difficult for some households to completely close the gap. Households which cannot achieve this goal because they have up to now not made adequate savings, can be found in all income and educational levels.

Suggested Citation

Börsch-Supan, Axel H. and Bucher-Koenen, Tabea and Ferrari, Irene and Kutlu-Koc, Vesile and Rausch, Johannes, The Development of the Pension Gap and German Household's Behavior (October 31, 2016). Max Planck Institute for Social Law and Social Policy Discussion Paper No. 02-2016. Available at SSRN: https://ssrn.com/abstract=2884091 or http://dx.doi.org/10.2139/ssrn.2884091

Axel Börsch-Supan (Contact Author)

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

HOME PAGE: http://www.mea.mpisoc.mpg.de

Tabea Bucher-Koenen

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

HOME PAGE: http://mea.mpisoc.mpg.de/

Irene Ferrari

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

Vesile Kutlu-Koc

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

Johannes Rausch

Max Planck Society for the Advancement of the Sciences ( email )

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