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The girl puts the coin in a piggy bank.
Natalia Lebedinskaya | Moment | Gets the image
Most people start retirement when they start working full-time and elementary school children in Germany can start early.
The country’s new government planned to submit a so -called pension with an early start, creating children under the age of six with a retirement pot. According to the new plan, 6-18-year-old children attending educational institutions can receive 10 euros (11 dollars) each month from a total of 1440 euros for the child for 12 years of law, as well as any profit that could pay cash.
From the age of 18 people can add personal funds to the account to the annual restrictions. Any profit should be without taxation before retirement age when cash becomes available to the owners.
The current retirement age of Germany is 67 years – and can always rise – that is, savings are worth over 60 years.
Politicians also claim that the young people are simply setting up for the future, the initiative will also help them become more experienced and experienced about money, save and invest.
A realistic plan?
Many details are still uncertain. So far, there have been no recommendations on how the savings will be invested and who will manage them.
Some experts point out that the total amount of these investments can not actually make a lot of money for each individual, and Johannes Gayer, Deputy Head of the State Economy Department in the DIW Berlin scientific institute, informing CNBC that the amount is mostly symbolic.
Ideally, he said, politics can motivate people to think about long -term financial security in life and introduce them to capital markets, including households where the topic otherwise cannot talk.
But Gayer notes that this scenario is not necessarily realistic.
“It is unclear whether it increases this motivation for old age or improve financial knowledge,” he said, CNBC translation reports.
“If people receive money passively and mostly should not make any investment decisions, not obviously as their financial knowledge is intended. Just be in” contact “with investment solutions, not necessarily leading to a good choice,” Gayer explained.
Christoph Schmidt, President of the Rwi Leibniz Institute of Economic Research, applied a similar tone.
“The fundamental mistake of the plan is that the actual safety lesson is to do without it to have more tomorrow – it becomes completely lost,” he said CNBC in translated comments. The funds will be better used in the German education system, he added.
“The main idea of an early starting pension, so giving young people who start capital when they enter adulthood is well manifested, but if you are more closely visible there, there are hardly convincing benefits of this concept,” he summarized.
