German population trends show continued demographic decline and ageing. This can be explained by changes in fertility, mortality and immigration rates. Low fertility leads to smaller numbers of infants every year, which, compounded by low mortality and, consequently, larger numbers of elderly, shifts the population ratio. Incoming migrants used to counterbalance this ratio but this is no longer sufficient to replace youth not born in Germany. This results in a lack of people in the working age. Especially the retirement sector will have a lack of workers, because the amount of needed of people needed will raise due ageing population. Furthermore there are at least three major challenges: the adaptability of social security systems sustaining economic growth, and preserving social cohesion which Germany has to face in the next years.
On average, Germans start work at the age of 19, retire at just under 62, and then spend over 15 years in retirement. If the forecasts are right that in ten years’ time the life expectancy of the Germans will increase from 77.5 to just under 81 years, pensioners will have to provide for another four years without going to work. The years they gain will become cost factors, burdening the state pension funds.