Pension indexation in Germany is calculated using a complex formula based on the dynamics of wage growth in the country
The Schneider family can be called average pensioners. Ute is 75 years old, her husband Ralf is 72, and they have been married for almost half a century. Ute worked for 38 years, with a ten-year break when she was at home caring for two small children. Her husband Ralf has a work record of 45 years. A correspondent from Deutsche Welle spoke with Ute in a Cologne cafe over a cup of coffee while her husband was at his part-time job.
"Ralf is an upholsterer by profession, he can't sit idle, so he decided to continue working in retirement for a minimum wage of 450 euros, which is not subject to taxation," says Ute Schneider.
Ute herself worked her entire life as a clerk in one of Cologne's offices. However, she worked not full-time but half-days – 19.5 hours per week. That way she had more time for children and family. Today, after deducting contributions to the health insurance fund and small taxes, the pensioner family has 1,900 euros left. Is that a lot or a little? Ute shrugs: it could be more, but it's a sin to complain, she admits. What do the Cologne pensioners spend their money on?
RENT AND UTILITIES
The largest part of the pension goes to rent and utilities. Ute and Ralf are lucky: they have lived in a rented three-room apartment for 43 years. In 1976, the rent was 150 German marks; today it is 500 euros – excluding utilities, and with utilities it is 700 euros.
"That's still reasonable," Ute emphasizes, "considering how quickly rental prices have risen in Cologne and throughout Germany."
The second part of expenses is telephone, internet, electricity, and insurance, whether liability, property, legal, or additional dental insurance and car insurance. That totals another 200 euros per month.
"My husband took out life insurance when he was young, and when he retired, the insurance company paid us a fairly large sum. It sits in a savings account – in case of illness or our death. We've taken care of everything; we don't want our children to have to pay for our funeral," Ute says with some pride in her voice.
HOUSEHOLD AND FOOD
After deducting 900 euros for housing, utilities, and insurance, exactly 1,000 euros remain from the pension. "That's for household and food," says Ute. "We are elderly, we don't eat much, and we are frugal with household expenses. All in all, we spend 600 euros a month. We manage to save 400 euros. I smoke; my husband quit five years ago. A pack of my cigarettes costs 6 euros 60 cents. I promised Ralf: as soon as cigarettes cost 7 euros, I'll quit. Out of principle. Then I'll save 100 euros a month – I smoke half a pack a day. In a year, I'll save 1,200 euros. That's almost a vacation in Spain," Ute explains.
The 400 euros that the Schneiders manage to save go to visiting cafes and restaurants, gifts for children and grandchildren. "In other words, they don't sit idle but are spent under another expense item. And I'll tell you what we want to spend the saved money on a little later," Ute promises with a smile.
LEISURE MAINLY IN GERMANY
The German word "Urlaub," meaning vacation, is also used by pensioners; it denotes rest away from home – trips and travels. So Ute says: "We mainly travel within Germany for a few days. Recently we spent three days in a picturesque spot in Sauerland. In September we'll go there again. There's an old castle in the mountains converted into a hotel, so we wanted to feel like a count and countess for a couple of days," she laughs.
The pensioner couple mainly spends on leisure the money Ralf earns in a year – 5,400 euros. Next year they plan a Danube cruise from the German city of Passau to Budapest. "Of course, it's not cheap – a week-long cruise for two will cost us 3,200 euros, but that includes two overnight stays in a hotel in Passau on the way there and back, train tickets, and insurance for all occasions – we're not young anymore, God knows what could happen to us. It's always safer to travel with insurance," emphasizes pensioner Ute.
That's what the Cologne pensioner family Schneider spends their pension and Ralf's part-time job on. Ute laments that the kiosk near their house closed a year ago; she also worked there part-time, but for free. Well, not exactly – she could take a pack of cigarettes for a few hours of work, drink tea and coffee for free, and chat with customers. That was enough for her – better than sitting at home, she thinks.
"And now only Ralf is busy, while I loaf around all day," the pensioner shrugs. Ute, by her own admission, is increasingly drawn to nature. "We plan to move out of the city," she says in farewell. "Our building is mostly occupied by students – noisy, restless – and we want peace and quiet. We've saved money for the move; now we just need to find an affordable apartment in one of the small towns near Cologne." The pensioners dream of a terrace or a small garden and a dog from a shelter: "We don't want a puppy; what if it outlives us and is left without owners? We don't wish that fate on it."