Millions of baby boomers are returning to the workforce after discovering their retirement savings aren’t enough to cover living expenses—a challenge expected to intensify as life expectancy rises. Meanwhile, Germany is introducing a program that may spare future generations from the same fate.
Under the new initiative, children as young as six will begin saving for retirement through the “early start pension.” Instead of relying on salary contributions, the German government will deposit €10 ($11) per month into accounts for children aged 6 to 18. Over 12 years, this could total over €1,440 ($1,700) per child, not including potential growth from compound interest.
Once beneficiaries turn 18, they can add personal contributions to the account, enjoying tax-free returns. However, the funds will only be accessible at retirement, currently set at age 67 in Germany. Although the program officially started on 1 January 2026, payments are expected to begin 1 January 2027, once the law is fully implemented. A government spokesperson said the initiative is part of a broader reform to strengthen both state and private pension systems.
Globally, people are staying in the workforce well beyond traditional retirement ages. In the U.S., nearly 20% of those aged 65 and above are still employed—roughly 11 million people, almost double the proportion from 35 years ago. In the U.K., a similar trend sees many baby boomers and late Gen Xers delaying retirement due to insufficient savings.
Financial experts emphasise the importance of starting early. Suze Orman has shown that consistent investing from a young age can yield significant returns. For instance, investing $100 monthly from age 25 to 65 at a 12% annual return could result in over $1.18 million at retirement. Starting just five years later, at 30, would leave around $650,000—highlighting the power of compounding.
By beginning retirement savings at age six, German children could potentially secure a future far more financially comfortable than today’s retirees, turning what once required continued work into a golden era of freedom and choice.
