Sorry: I have to kick our (women’s) butts so that every woman finally takes her finances into her own hands!
Two weeks ago, I was invited to speak at Goethe University in Frankfurt am Main about women and our particular challenges in retirement planning.
And what can I say: I thought I already knew a lot about poverty in old age, how important it is to have your finances under control, the topic of private pension plans and so on. Through the other speeches of the other speakers, I went home with fresh knowledge, thoughtful and above all with very concrete figures in my luggage. These numbers and what they mean are what we are talking about here.
Pension can also be an exciting topic
Spoiler: Actually, I’m more of a positive motivator, but maybe retirement and old-age poverty is not a topic where you are positively motivated from the start, but rather one that first creates an unpleasant feeling in the stomach area. …but then becomes motivating in the second step!
Do you know the difference between poverty line and at-risk-of-poverty threshold? The poverty line is the amount needed to cover the minimum subsistence level. Currently, for a one-person household, it is at 1,148 euros (net).
The at-risk-of-poverty threshold, currently at 1.251 Euro (net), also for a one-person household (source: destatis). The at-risk-of-poverty threshold is the income that is below 60% of the average income, which in 2022 was 43,291 euros (albeit gross).
What does this have to do with my pension, you may be asking yourself. Take a look at your annual pension information. What does it say on page 1, under pension rights earned to date? Please don’t look at the bottom number, that is only the average of the past 5 years and therefore not as meaningful.
The average pension and what it has to do with old-age poverty
And here it comes: Did you know that the average pension is currently 1,218 euros for men and 809 euros for women in western Germany? In eastern Germany, the differences between the sexes are not quite as great, but pensions are lower overall than in the west. Men received 1,143 euros and women 1072 euros. (Source: Deutsche Rentenversicherung Bund (2022), statistics portal, calculations Sozialpolitik aktuell.de)
Do you notice anything? Yes, that’s right: ALL the amounts listed here are below the at-risk-of-poverty threshold of 1,251 euros!
By the way: The minimum security or minimum pension is (currently) 800 – 1,050 euros and thus far below the at-risk-of-poverty threshold. Old age poverty I hear you calling!
Here’s how you can fight poverty in old age
Okay, now let’s get out of this state of shock! There’s only one thing that helps: getting involved. And by that I mean that we don’t rely on the state pension, because it’s pretty sure it won’t be enough. So we should take our retirement planning, our finances into our own hands and finally start looking at asset accumulation, our own pension gap and how we can close it. In fact, it’s a lot easier than you probably think right now. And here comes another tutorial to go right away:
Start with these two steps:
First, build knowledge, with about 15 hours you’re there. You can use YouTube videos, magazines, books or podcasts. If you don’t feel like learning all by yourself, then a self-study course with explanatory videos, a live group course, or 1:1 mentoring that focuses on your individual needs is right for you.
Secondly, once you’ve built a good base of knowledge, you can build a system for yourself or then go to a bank advisor or fee-based advisor, well pre-informed and able to ask questions.
You don’t have to rock out the 15 hours in one day. The important thing is to get going. How about 30 minutes a week for knowledge building for starters? In any case, take care of it now, because no one cares about your relaxing retirement more than you do.
About the author
Hey! Ich bin Kristin, Finanzmentorin und die Gründerin von MoneyFacture. Ich will Frauen dabei unterstützen, finanziell selbstbestimmt zu werden. Das sind viele von uns nämlich nicht. Warum? Weil uns auf diese eine wichtige Sache oft weder Schule noch Eltern vorbereiten: Den Umgang mit unserem eigenen Geld! Dabei ist finanzielle Bildung der Schlüssel zur finanziellen Unabhängigkeit!
Ich habe MoneyFacture gegründet, weil ich dich auf deinem Weg begleiten möchte, finanziell unabhängig zu werden. Du sollst deine Finanzentscheidungen eigenständig treffen. Denn so liegt deine finanzielle Zukunft auch wirklich in deinen Händen.
Ich verkaufe keine Finanz- oder Versicherungsprodukte. Mit mir lernst du die Themen Finanzen ordnen und Vermögen aufbauen mit Spaß und Leichtigkeit.
Nimm deine Finanzen selbst in die Hand. Niemandem ist dein Geld so wichtig wie dir selbst!
