Germany Faces Challenges with Oldest Workforce in EU Amid Rising Retirement Ages

Germany currently has the oldest workforce in the European Union, with approximately 24% of its labor force aged between 55 and 64 years. This equates to around 9.8 million workers out of roughly 40.9 million employed as of 2024, a proportion significantly above the EU average of about 20%. Other EU countries with similarly aging workforces include Italy at 23% and Bulgaria at 22.3%, while countries like Malta and Luxembourg report far lower percentages of older workers.

This demographic trend is driven largely by Germany's aging population and changes in retirement policies. The average retirement age has increased notably from 63 years in 2004 to 64.7 years in 2024, with a planned increase to 67 years by 2029. The raising of the legal retirement age and the phasing out of early retirement options that previously allowed retirement as early as 60 have contributed to a growing number of older employees remaining active in the workforce.

According to data from the German Pension Insurance and Eurostat analyses, rising life expectancy also means retirees are drawing pensions for longer periods. In 2024, women are expected to receive pensions for an average of 22.1 years and men for 18.9 years, up from 19.5 and 14.3 years respectively two decades earlier. The OECD has cautioned that these demographic pressures could impose significant strains on Germany’s pension system, as the working-age population is projected to shrink over the next 40 years. The OECD recommends linking the statutory retirement age to life expectancy and discouraging early retirement to ensure sustainable pension financing.

By the late 2030s, the share of individuals aged 67 and older in Germany is expected to rise from 20% to over 25%, underscoring the urgency of adapting the country's pension policies and labor market strategies. The evolving demographic landscape presents both challenges and opportunities as Germany navigates an aging society with a delaying retirement trend.