The Riester pension (Riester-Rente) is one of the best-known state-subsidised retirement products in Germany. It was introduced in 2002 to counter the growing pension gap caused by the gradual lowering of the pension level in statutory pension insurance. It is named after the former Federal Minister of Labour Walter Riester. Despite some criticism, it is an interesting, state-supported option for many people who want supplementary retirement provision.
What sets the Riester pension apart is the state subsidy: everyone eligible who pays at least 4 percent of the previous year's gross income (minus the allowances) into a Riester contract receives state allowances. The basic allowance is €175 a year. There are extra allowances for each child, and people under 25 starting their career get a one-off bonus of €200. In addition, the contributions you pay in can be claimed as special expenses (Sonderausgaben) for tax. That is a double benefit, which makes the Riester pension very attractive for many.
Riester contracts come in several forms: traditional pension insurance, unit-linked Riester policies, Riester bank savings plans, Riester fund savings plans and the so-called Wohn-Riester for financing your own home. Each form has its own pros and cons, and the right product depends on your goals, your appetite for risk and your personal situation. The wrong choice can reduce the benefit of the state subsidy considerably.
The Riester pension is for all employees who pay compulsory social insurance, as well as civil servants, judges and certain self-employed people. It is especially worthwhile for people with children, because of the higher allowances, and for low earners, because the state allowances weigh particularly heavily against their own contribution and raise the return clearly.
When taking out a Riester contract, look at the total cost ratio, the guarantee terms, the return prospects and the flexibility of the contract.
We advise you personally and help you make the right decision for your retirement provision, based on your personal situation and financial goals.
Riester pension benefits
Pension guaranteed for life, with a minimum guarantee of the contributions paid in plus state allowances at the start of the pension. Flexible payout: lifelong pension with an optional partial lump sum of up to 30%. Pension start between ages 62 and 85.
Optional add-on: occupational disability pension to secure contributions. Indexation: annual premium increase without a health check.
Investment concepts: Perspektive (security-oriented, returns secured in the Allianz guarantee fund), KomfortDynamik (balanced, smoothing of fluctuations), InvestFlex (growth-oriented, individual funds/ETFs with guaranteed capital).
Property subsidy: withdrawal of capital or full use for an owner-occupied home is possible.
Tax benefits: allowances and possible tax benefits of up to €2,100 a year. No contributions due in retirement for compulsory members of statutory health insurance (GKV).
