While the Riester pension was worthwhile in the past for a large number of families and high-earning singles due to the support and significantly higher guaranteed interest rates, this is no longer the case for newly concluded and newly concluded Riester contracts.
The most important thing in brief:
- The Riester pension used to be worthwhile for a large number of families and also high-earning singles due to the support and significantly higher guaranteed interest rates.
- It is usually no longer worthwhile to conclude a new Riester contract today.
- If your living and income circumstances change, you should review the contract.
Riester pension for families with children
The funding for Families with children In most cases, it consists of allowances to which people are entitled regardless of income.
- A family with 2 children born before 2008 is entitled to 720 euros in direct state funding.
- If the children were born after 2008, the entitlement is 950 euros.
The allowances significantly reduce the savings contribution – the so-called minimum personal contribution – which must be spent from your own resources.
Will it be maximum Eligible amount of 2,100 euros saved, 950 euros correspond to almost 45 percent. In any case, a basic amount of 60 euros must be saved.
If, after weighing up all the advantages and disadvantages, a new contract comes into consideration, depending on the tax situation, it may also make sense for only one spouse to conclude a Riester contract into which the child allowances flow.
Riester pension for low earners without children
For Low earners without childrenwhose part-time employment is only intended for the short or medium term, can Riester pension temporarily interesting be. Due to the low income, the minimum contribution is low. The allowance of 175 euros is definitely there. However, anyone who is permanently employed in part-time jobs will only receive a small statutory pension in old age, which may be below the so-called basic security.
Riester pension and retirement provision
For additional state-sponsored pension provision (company pension provision, Riester pension), an allowance was introduced with the Company Pension Strengthening Act, which has been in effect since 2018. If the requirements are met, 100 euros plus 30 percent of the amounts above this will not be counted towards basic security in old age. The total amount is limited to 50 percent of the standard level 1 requirement for single people (as of 2022: 50 percent of 449.00 euros = 224.50 euros). Amounts beyond this will only be fully credited.
For high-earning, eligible singles The amount of the allowance of 175 euros is not decisive for the funding. Your support primarily consists of the deduction of special expenses up to a maximum of 2,100 euros.
When is a Riester pension worthwhile?
It is important to determine whether a Riester pension is worthwhile or not
- the Costs and fees of the contract and
- the Amount of guaranteed interest.
This has fallen significantly in recent years. Since January 1, 2022, it has only been 0.25 percent for new contracts. This means that the returns cannot be high, so that a result just above the statutory contribution guarantee at the start of the payout phase is likely.
Accordingly, it depends on the Choice of product and on the personal preferences Security versus risk. But be careful, the prospect of returns are always just predictions that can, but do not necessarily, come true.
