Every year, millions of retirees look hopefully at the announcements of pension adjustments. On paper it always sounds like good news: The pension increases by a few percentage points. But what really happens is a quiet, gradual game of numbers that ultimately takes more than there is. Because behind the supposed increase, the cold progression lurks – aInconspicuous, technical term with profound consequences for everyone who is dependent on their pension.
When the tax increases before income rises
The cold progression ensures that pension increases are losing their tax importance before they even become noticeable. As soon as pensions rise slightly, many seniors slip into higher tax areas or border tax rates. This means that a larger part of their income flows to the state without their real money – what counts in everyday life – actuallyimproved. What looks like a blessing on paper turns out to be an increase in tax burden in reality.
The shadow of inflation
While taxes are rumored to increase pensions, a second, even more powerful opponent looks in the background: inflation. It often rises faster than any net pension increase. The prices in the supermarket, the costs for energy, rent, services – all of this is attracting at ever shorter intervals in times of economic uncertainty. Even those who get a seemingly generous adjustment feelOf this, after taxes and price increases, little more than a fleeting moment of relief. The real value of money shrinks while spending is growing unstoppably.
The invisible pension cut
Over the years, an effect is created that is painfully felt by many, but is rarely expressed openly: a real pension cut through the back door. Nominally, the pension is higher today than a few years ago. But real, i.e. in her purchasing power, it is often lower. Everyday life is getting more expensive, the available amount smaller, the scope for play. Older people have to be more and more frequentStart counting, forgoing, renouncing again – even though they officially get more.
No balance in sight
The problem is systemic. There are hardly any automatic corrections in the tax and pension system that cushion this effect. Cold progression, intended as a side effect, has long since become an integral part that gnaws at the retirement of the retirees unnoticed. Over the years, small disadvantages add up to noticeable losses and trust in pension policydwindles. Those who have worked their lives experience how their prosperity is slowly but steadily eroding.
The silent price of the system
In the end, the bitter impression remains that the system is against those who should support it the most. Pension increases that are supposed to bring security behind leave uncertainty. Tax policy mechanisms that should create justice promote inequality. And inflation dynamics that can hardly be stopped politically, are accelerating this development. This is howA spiral in which nominal improvements mean real loss – and see the affected pensioners less and less of the supposed growth of prosperity of our time.
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