Few Czechs saving up for retirement
Monday's Lidove Noviny newspaper reported on living conditions for pensioners in the Czech Republic, and compared it with that of both Slovakia and Germany. Not surprisingly, the standard of living for a Czech pensioner is far below that of the average German, but how well is the older generation coping here in the Czech Republic? Pavla Navratilova reports:
The average pensioner receives only about 6,000 crowns in state payouts almost regardless of what their pre-retirement income was. This is due to the way government agencies calculate pensions, and therefore, only pre-arranged retirement funds differentiate between the standard of living among Czech pensioners. Property, saving funds, and investments are responsible for individual differences.
Lidove Noviny gives a perspective on what kind of savings are required to build up a solid fund for future income support. If you were to put away 100 Kc each month for the next 30 years, you would save almost 150,000 Kc. It is estimated that if you were able to put aside 1000 Kc a month, over the same thirty year period you could save over one million crowns. But are Czechs thinking ahead? I asked a 35-year-old woman on the street about her financial plans for the future. So what can Czechs expect in the future? Monday's Lidove Noviny gives a dire view which seems to reflect the state of pensioners worldwide: although the average age of retirement is 60 for males and 57 for females, it predicts that today's 40-something generation may well have to work on an average of five more years, bumping up the minimum retirement age to 65.
Looking furthur ahead, Lidove Noviny doesn't even hazard a guess as to the future state of pensions for today's younger generations! Perhaps, with a few hundred Kc saved up every month for the next thirty years, the young are going to be able to support themselves in their old age; but this doesn't take into consideration the rate of inflation which can destablise even the most forward-thinking of today's youth.
Savings aside, how well off are Czech pensioners compared to those in other parts of Eastern Europe? In terms of the amount of governmental financial support, it is hard to compare the 6,000 Kc Czech average to the average Eastern German retiree who is given over 30,000 Kc. Lidove Noviny did a much better comparison when it looked at the percentage Czechs, Slovaks, and Germans pensioners spend on various neccessities. For example, Czech spend close to 30% of their pensions on food while both East and West Germans average closer to 20%. Czech retirees spend a mere 3.4% of their pensions on clothing, while Slovaks spend more than 4% and the West Germans spend almost 8%.
Most interesting are the results with the greatest differences: On rent and utilities, Slovak retirees need to spend a mere 18% of their total pensions, while Czechs need to spend close to a quarter of their pensions. And yet this is quite acceptable, compared to the whopping 35% that East Germans need to spend. Also, the percentage dedicated to recreation and cultural pursuits is also of interest. While Slovaks and East Germans use only 6% of their incomes for these pursuits, Czechs average closer to 8% while West Germans over 10%. Unfortunately these percentages can only give a wide perliminary view to the actual lives of individual pensioners and the comparision can only be taken so far.