> Especially if I might be 67 by then, which is the legal retirement age, where I live.

When you say "legal retirement age", what do you mean? Is this to receive some sort of retirement benefit like Social Security in the US? Or is it something else?

That, plus you'll pay penalties (10%) if you draw on a retirement account like an IRA/401k before retirement age.

The retirement system is completely broken over here. As an employee you have to pay into it. I pay > 500€/mo, which a big part of my pay check and one of my largest expenses. My employer has to pay the same amount on top. You might or might not consider this essentially an additional cost for me as well. It is intended to be the primary pension plan for most people, though by the time I will go into retirement, the whole system will be unviable financially and I might get nothing. If I do get something, I get it starting after completing my 67th year of life. Of course I'd rather invest that money privately. If I choose to go into retirement early, I will have to pay hefty life-long penalties - 0.3% per month that I retire early. Obviously a couple of percent over 20 years of retirement or so can hurt quite a bit.

It might sound silly, but it's one of the main reasons I want to leave this country.

It sounds silly because Germany is a good place to retire in, not a good place to be young and work.

> by the time I will go into retirement, the whole system will be unviable financially and I might get nothing.

What do you mean when you say "financially unviable"? There have been similar concerns raised about the US retirement system, but AFAIK that only means less money coming in than promised going out. The income is predicted to stabilize at ~75% of expenses after the "Baby Boom" generation finishes retiring. At the worst, I'd expect a pension cut rather than a complete collapse to 0.

I don't know how the US retirement system works, but I think Germany is pretty unique in that the current working population is directly paying for the pensions of the retired population. There is no investment of those funds of any kind or something like that. The state is already taking up huge loans to finance this, as we don't have enough payers. We have about two payers to one pensioner at the moment, but when I will be 67 with the current population development it will be one payer to two pensioners. Even with more massive debt one payer will not be able to pay the pensions of two other people. It might just be a huge cut, but if it's not enough to live off of, large parts of the older generation might end up on the street. A large part of the younger generation is aware of this, but 23% of Germans are over 65 and the median age is 45 so older people generally have a lot of voting power and the issue is largely ignored. Very recently there were proposals to switch to a system in which the pension payments are invested into index funds, but it was decried as "gambling away our pensions" and the proposal was shot down.

The US retirement system (Social Security) is paid for the same way. The population pyramid for Germany does show a much larger hump of upcoming retirements compared to the US though. The ~30yo population cohort has grown in recent years though (through immigration), so maybe it won't be as bad as you expect.

Why do you think Index Funds would solve the upcoming issue?

https://en.wikipedia.org/wiki/File:Gemany_population_pyramid...

mate you think retirement age is 67, thats very cute of you. just wait for 20 years and see how many times this milestone will change with the way the world population is going :)

This. People don’t see what’s coming. The Era of Abundance is over.

I don’t know your circumstances so don’t take this personally as these are some general ideas:

- work 4 days a week only

- save 30–50% of your income and retire after 15 years

- cook your own meals to eat healthier and cheaper (bring lunch to work)

- buy used stuff from a couple years ago

- fix your own stuff and buy cheap “broken” things that are fixable

This way you might not need to die at work or wait 67 to retire.