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How Christmas presents influence our future

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We all know this feeling that comes up every January - tired of eating a lot and drinking a lot of wine, and your checking account is charged by this large credit card bill before the long-awaited January salary. So every year we remember how painful the first month can be - we start saving for Christmas in advance. For example, by putting money aside in our piggy bank or buying Bitcoin in hopes of another exponential price hike so we can buy a real bear instead of a teddy bear for our niece. Every year we know that in December we had to put some money aside to make our loved ones happy.

1. If you look at the big picture when we do it for Christmas, why shouldn't we do it every year until we retire?

The increasing aging of the population is actually jeopardizing our entire pension system. Let's say you worked 40 years. You paid a certain amount into the pension system each year. The pension fund will (hopefully :) invest these deposits, and at the end of the term the savings plus the (theoretically) compound interest earned will be what you get paid.The increasing aging of the population is actually jeopardizing our entire pension system. Let's say you worked 40 years. You paid a certain amount into the pension system each year. The pension fund will (hopefully :) invest these deposits, and at the end of the term the savings plus the (theoretically) compound interest earned will be what you get paid.Now comes the catch: the generation of our parents and grandparents (generally referred to as Gen-X and baby boomers) enjoyed generous pension schemes after the war - that is, early retirement age and predefined benefits (especially the predefined amount of their monthly pension). At that time, however, nobody expected that people would live as long and as numerous as today. What does that mean? Building an adequate pension system is a game of chance and governments have lost. In the past, not enough was paid up, so that today there are pension deficits that have to be covered by the younger generations.If you haven't followed the latest media coverage, France is currently working hard to reform its valued pension system. With a working week of 35 hours and an official retirement age of 62 (one of the lowest in the developed world), the state finally covers the deficit between contributions and payments. In numbers: 14% of France's total economic output is spent on public pensions!But what does the picture look like for us in Germany? Our government is also aware of unfavorable demographic trends and domestic pension obligations and could therefore consider creating a state pension fund that complements the current pay-as-you-go system. According to a recent ING study, almost 60% of Germans currently working are not sure whether they will have enough money when they retire, and over 40% are already considering finding a part-time job to continue making some money when they retire.

2. But what about our reputation as a world savings champion?

Germany is still saving a lot, but with the interest rates that will remain at the current level for the foreseeable future, the interest on your cash savings account may not even be enough for a coffee in old age.The 2015 Nobel Prize in Economics, Angus Deaton, said: “Life is better today than at almost any time in history”. While we would all agree with this statement, we shouldn't just rely on the past. Instead, we have to look ahead. We ask ourselves whether we should wait for governments to take action and raise interest rates again, or if we should take another route to secure a secure financial future for ourselves and our loved ones.