This morning, economist Bruno Wattenbergh spoke of retirement and its link with poverty in his column on Bel RTL.
Does retirement mean a risk of poverty?
Bruno Wattenbergh: So for all Belgians, retirement means a drop in income. But indeed, for some of them, this drop in income brings them closer to the poverty line. 16% of pensioners would thus be at this poverty line. And two-thirds of those receiving pensions below the poverty line are women.
For the record, what is this poverty line in Belgium?
The criterion applied to measure the risk of monetary poverty is the threshold of 60% of the equivalent median net income. When the total net income of a household is below this threshold, we speak of a risk of poverty. For Belgium, the poverty line is an income of either € 1,085 net per month for a single person or € 2,279 net per month for a household made up of two adults and two children under 14 years of age.
Do you regularly explain that Belgian retirees who are owners are doing better?
It’s true, pensioners who have real estate are doing better than others. For most of them, this heritage is simply the house or apartment that they have patiently paid for over the course of their professional career. The disappearance of the obligation to pay rent clearly makes the difference in terms of purchasing power and standard of living for poor pensioners.
And the figures confirm it: if we compare retired owner and retired employee of 16% of poor retirees, we go to only 1.4%. It’s a huge difference.
What would also de facto change our bad position compared to our neighbors in terms of pension level?
Exactly. Our pensions in Belgium are comparatively lower than those of our neighbors. This is partly offset by more expenditure borne by the public authorities than among our neighbors, which increases the pocket salary of the retiree.
Then, if we compare the Belgian pensioner and the German pensioner, even if the level of pensions is a little higher in Germany, the elderly poor are four times more numerous than with us.
Are there other factors of poverty when you retire?
Yes. There are 3 factors that can push citizens into poverty: low income, insufficient savings and lack of liquidity to face an unforeseen expenditure of 1,000 euros. 6.7% of Belgian households belong to this category, there are very few owners.
What can we advise?
A priori, to save as soon as possible to buy a home, even if it means reselling it and buying another one according to the evolution of its needs. But as real estate prices have risen sharply, this rule must be put into perspective. It is up to everyone to do their calculations and constantly compare purchase and rental. But in any case, to try to buy something for his old age. And no doubt that the public authorities have their role to play in promoting these acquisitions.