Poor young, poor old

Imagine that you're 35 years old and just beginning to think about financial planning for the future. You'd like to do some travelling, maybe buy a car, and have some cash left to slip your grandchildren a few bucks every now and then.

Forget it. All that's just an illusion. Your grandkids are going to be supporting you! That's the bitter reality. From 2030 on, one in two retired Germans will be in danger of slipping below the poverty line. That's according to a recent study by the German state broadcaster Westdeutscher Rundfunk. Pensions won't be high enough to maintain a good standard of living. After 2030, monthly pensions will amount to just about 43.5 percent of the average wage a worker earned over his or her entire career.

These days, saving isn't easy

That's how the state plans to say "Thank you" after all those years of hard work. This isn't only upsetting, it's infuriating. What kind of country takes so much from the plates of its youngest generations, only to give out table scraps to the elderly?

However, you don't feel like getting angry. Instead, you tell yourself, "Then I'll just save my money, or put some money aside for the future." But there's one problem. If you're 35 and only just beginning to save, you're going to find yourself up against some pretty unfavorable interest rates. In fact, rates are so low at the moment that saving just isn't worth it. With interest rates of 2 percent, you'd have to save three times as much than if those rates were at 5 percent - if you're looking to secure a steady income for your retirement.

If pensioners are being hoodwinked, then younger generations and savers are being conned. It's been said that the level of wealth in our society is steadily rising. So where's all the money going? Ah yes, into offshore companies exposed by the Panama Papers revelations. Or into top-of-the-line yachts for the growing number of billionaires. The 62 richest people in the world own as much as the poorest 3.5 billion. That's outrageous.

If there's one thing the state doesn't like, it's cold, hard cash

So what can be done? Well, we could all go out, withdraw a bunch of money from ATMs and stash it in our pillows. That's one option. At least we'd know exactly how much we have and would have constant access to it. That may sound silly, but a lot of retirees out there are already doing it - and they'll likely advise their grandchildren to do the same.

Cash is, in fact, in demand despite increasing digitalization. Cash is needed - and hoarded - all over the world, whether in India, the United States or Germany. The Swiss have already limited the amount of francs depositors can withdraw from ATMs. The reason is that cash payments aren't easily tracked. It's not only banks that are interested in where you're spending your money. The state wants to know too so it can claim as much tax revenue as possible.

Is anything safe anymore?

Such a starting point for saving would intimidate and discourage any 35-year-old person. He or she only wanted to stuff some money into a pillowcase to ensure there's some left over for when he or she stops working. But even that won't help against sleepless nights. Just think of the rising number of burglaries. There's simply not enough money to protect everyone.

Alright, says our 35-year-old protagonist: "I'll just go and buy some real estate. With interest rates so low, it could be worth it. Loans are seldom as cheap as they are now. But beware: It's only a matter of time until the next crash! The risk of severe losses if housing prices were to fall again is high.

Alas, for eventual pensioners, there's only one thing to do: Get ready for tough times ahead.

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