Flexible living arrangements and retirement provision

Executive Summary

The Gradido model - developed by the Gradido Academy for Economic Bionics over more than 20 years of research - combines an innovative money creation principle with a systemic approach to retirement provision and flexible living. The triple money creation of 1,000 GDD per person per month (for basic income, public budget and equalization and environmental funds) combined with a planned perishability of 50% per year creates a self-regulating system that offers structurally new possibilities for individual life management and old-age provision. In contrast to today's pension system, which is based on the so-called „intergenerational contract“, Gradido's pension scheme is financed entirely by money creation - regardless of demographic conditions.

1. the foundation: triple money creation and transience

1.1 The principle of money creation

In the existing financial system, money is created almost exclusively through debt: Every credit on one side necessarily means an equal debt on the other. Gradido fundamentally breaks down this mechanism. For every person on earth, 3 × 1,000 GDD (Gradido) are created every month without creating debt:

• 1st pillar: 1,000 GDD Active Basic Income (AGE) - for the citizen

• 2nd pillar: 1,000 GDD Government income - for the public budget including health and social services

• 3rd pillar: 1,000 GDD Equalization and Environmental Fund (AUF) - for environmental remediation and global compensation measures

In Germany, the second money creation is roughly equivalent to the current public budget (federal, state and local government) plus the health and social services. The model can start as a supplement to the existing system and be scaled up to replace it completely - including the abolition of taxes and compulsory insurance.

1.2 Transience as a self-regulating mechanism

The central counterweight to the continuous creation of money is the Planned perishability of 50% per year. In concrete terms, this means that of 100 GDD in an account, 50 GDD will still be available after one year. Perishability is continuously deducted from the account balance.

This principle is based on the natural law of the cycle of creation and decay: Just as bread is baked, eaten and perishes, so money circulates - it is created, used and dissolves to make room for something new. The result is a constant, non-manipulable money supply per capita (around 54,000 GDD in circulation), stable prices and a built-in inflation brake without central bank intervention.

The most important consequence for individual financial planning: If you hoard money, you lose it through transience. If you lend it out, you get the same amount back and thus have a structural advantage of 50% per year or 100% in the long term compared to not lending it out. This mechanism is the key to understanding interest-free loans and flexible living.

2. flexible living arrangements through interest-free loans

2.1 The WIN-WIN logic of the interest-free loan

In the gradido system, interest is structurally superfluous and would hardly find any takers. The logic is impressively simple: as a lender, without lending you would only have half the money after one year, a quarter after two years and so on. (due to perishability). With lending, you get 100% back. The return on the interest-free loan compared to not lending is therefore effectively 100% (you retain the full value instead of losing it in the long term).

For the Borrower the advantage is also clear: he receives liquidity without interest costs. Even if he is unable to repay the loan, the loss for the lender is less than if he had not granted a loan at all - because without a loan, transience would have reduced the money anyway. This creates a genuine WIN-WIN situation that structurally rewards cooperation and replaces the old competitive mindset.

2.2 The Alice Bob model: planning time-outs without pressure to generate returns

The model of flexible living arrangements through mutual interest-free lending can be illustrated using a simple example:

Scenario: Alice currently earns more than she needs and would like to take a 5-year sabbatical in 5 years' time. Bob, on the other hand, wants to take time out now, but hasn't saved enough.

The solution: Alice gives Bob a monthly interest-free loan. Bob enjoys his 5-year sabbatical and then returns to work. Bob now pays his loan back to Alice every month - just in time for the start of Alice's planned sabbatical.

Why this is attractive for Alice: If Alice had simply hoarded her money, transience would destroy 50% of it each year. By lending it to Bob interest-free, she gets the same nominal amount back - a significant advantage over not lending it. The risk of a loan default is calculable: Bob's Active Basic Income (1,000 GDD/month) is systemically secured, as it is created through money creation. And all his other income is also tax-free.

Institutional processing: Such agreements can be made directly between individuals or for a fee via Financial institutions who offer corresponding contracts and credit default insurance. This opens up a completely new market for financial products geared towards the common good - without interest, but with protection.

2.3 Fields of application of flexible living arrangements

The Alice Bob principle can be applied to many phases of life:

• Parental leave and childcare: Parents can finance time off for childcare without having to make interest payments

• Further education and study: Young people can finance phases of education with interest-free loans instead of building up mountains of debt

• Creative phases: Artists, writers and composers can shape creative phases without economic pressure

• Sabbatical years: Exhausted employees can take regenerative breaks and pay back later

• Business start-ups: Founders receive start-up capital interest-free, which facilitates innovation

The Active Basic Income (AGE) of 1,000 GDD/month always acts as a base - a systemically secured minimum income that never leaves borrowers completely destitute. This structurally reduces the default risk and makes interest-free loans economically attractive.

3. pension provision in the Gradido model

3.1 The flexible retirement income model

The Gradido model provides for a Flexible, gradual pension provision which is financed entirely by money creation:

For people aged 65 and over a monthly unconditional basic income of 2,000 GDD applies - tax and duty-free, of course. From this age, there is no obligation to work for the common good; the income is unconditional. In terms of purchasing power - after the elimination of taxes, social security contributions and interest-related price mark-ups (approx. 75% of today's expenditure is accounted for by these items) - this is probably more than today's nominal value.

3.2 Financing: Without an intergenerational contract

The retirement system is financed by two complementary mechanisms:

1. Gradual reduction of government money creation: As citizens get older, the money created for the public budget (2nd pillar) is reduced proportionately in favor of the increased basic income for senior citizens up to 50%. As senior citizens make less use of state services (e.g. education, vocational training), this is systemically justifiable.

2. Equalization and Environmental Fund (AUF): The third pillar of money creation also contributes to the care of the elderly, as some of the social tasks of the AUF can be performed by older people (volunteering, sharing experience, community care).

The decisive structural feature: No „intergenerational contract“ is required. The traditional pension system is based on the active working generation financing the pensions of the older generation by paying contributions. This model is coming under extreme pressure due to demographic change (falling birth rates, rising life expectancy). With Gradido, this problem does not exist structurally: every person, at every age, triggers the same threefold money creation per capita. The system is demographically neutral and robust.

3.3 The transition from AGE to UBI: why it works

In the current workforce, people over 56 often perform fewer hours of physical labor, but continue to make valuable contributions through experience sharing, mentoring, caring for grandchildren and community engagement. The Gradido model recognizes these contributions systemically by increasing income and gradually relaxing formal requirements.

From the age of 65, full unconditionality applies: 2,000 GDD per month, without any obligation. This corresponds to the logic of the AGE for older people - people who can no longer contribute to the common good for health or age-related reasons naturally receive their basic income unconditionally.

3.4 Additional retirement provision through credit savings

In addition to the systemically guaranteed retirement income, there is also the option of, Additional pension provision via the Alice Bob principle build up. Anyone who lends money at a young or middle age (i.e. lends money that would otherwise be lost to perishability) will later receive the same nominal return on this money. Perishability makes interest-free saving through lending more attractive than hoarding - and thus enables voluntary private pension provision without interest pressure and without inflation risk.

4 Systemic advantages compared to the current pension system

4.1 Comparison of pension systems

4.2 The elimination of the generation problem

The demographic problem of conventional pension insurance - too few contributors for too many pensioners - is systemically resolved in the Gradido model. Since the creation of money for every person, is the same regardless of employment status and age, a higher proportion of senior citizens does not increase the burden on the working generation.

Specifically: There are around 84 million people living in Germany. Each triggers 3,000 GDD/month of money creation. The money supply remains constant due to transience - regardless of how many of these people are young, employed or old. Products and services are already available in abundance - a trend that will be further intensified by automation and AI.

4.3 Health implications: Activity as a protective factor

The Active Basic Income is based on the principle of Unconditional participationEveryone has the right to contribute to the community with their talents and inclinations. This also applies to older people - according to their abilities and in a suitable form.

The psychological and health value of this concept is considerable: the feeling of being needed and belonging is a fundamental human need. Older people who remain meaningfully active - be it in caring for grandchildren, passing on knowledge or looking after the community - stay healthy and productive for longer. The Gradido model creates the economic basis for this without coercion.

5. embedding in the overall strategic Gradido architecture

5.1 The threefold good as an ethical basis

All the mechanisms described - interest-free loans, flexible living arrangements and retirement provision - are an expression of Gradido's fundamental ethical principle: the Triple well-being of the individual, the community and the greater whole. The economy should not work against life, but serve life. Retirement provision without intergenerational conflict and flexible living arrangements without interest extraction are concrete manifestations of this principle.

5.2 No taxes, no levies: Real purchasing power

An often underestimated factor is the structural freedom from taxes and levies in the Gradido system. Today, it is estimated that around three quarters of all expenditure flows into the system in the form of taxes, social security contributions and interest-related price mark-ups. With Gradido, these costs are completely eliminated - the state budget and social welfare system are financed by the second pillar of money creation. The real purchasing power of 1,000 GDD would thus theoretically correspond to the current equivalent of EUR 4,000. In practice, prices will probably be regulated according to supply and demand. We assume that the purchasing power of the gradido will be at least as high as that of the euro, probably even higher.

5.3 Scalability: from local community to global currency

The Gradido model is not limited to a specific geopolitical territory. It is scalable from local community currencies (exchange circles, common good points) to a fully decentralized peace currency. The mechanisms described here for pension provision and flexible living arrangements work at any scaling level - i.e. also in the previously poor countries - as they are based on the universal principle of per capita money creation.

6 Critical reflection and open questions

6.1 Transition challenges

The changeover to the Gradido system requires a carefully managed transition. Existing pension entitlements, saved capital assets and current loan agreements would have to be transferred to the new system. The Gradido book suggests annuitizing lost private assets (e.g. due to a money crash) over 20 years: A lost fortune of EUR 100,000 would be paid out as 5,000 GDD per year over 20 years. Anyone who needs the money immediately would receive an interest-free loan with an automatic repayment function.

6.2 Institutional infrastructure for loan brokerage

The efficient implementation of the Alice Bob principle on a large scale requires suitable Financial institutions, which:

• Bringing borrowers and lenders together

• Offer standardized contracts

• Provide credit default insurance

• Manage the processing of repayments over long periods of time

This task can be taken over by the current financial institutions.

6.3 Trust and acceptance issues

The overall model requires mutual trust - both between lenders and borrowers and towards the money creation system itself. In the current debt money system, trust has been systematically undermined by interest extraction mechanisms: „charity is an economic risk“ in the old system. With Gradido, this logic is reversed - cooperation and trust are economically rewarded by the system structure.

Conclusion

The Gradido model, with its triple money creation and planned transience, offers an innovative, self-regulating alternative to both traditional retirement provision and rigid employment biographies. The interest-free credit structure enables flexible lifestyles - time out, sabbatical years, family phases, creative breaks - without interest charges and structurally rewards cooperation. The gradual retirement income of 1,200 GDD (from the age of 56) to 2,000 GDD (from the age of 65) as an unconditional basic income - financed by the creation of money, free of taxes and levies - creates a demographically robust provision for senior citizens that is free of intergenerational conflict. It remains the task of concrete pilot implementations to prove the practical feasibility of this theoretically convincing architecture.