Secure state-sponsored retirement provision
Benefit from government allowances and tax advantages with the Riester pension – your secure foundation for retirement. nextsure provides you with comprehensive and digital information and advice.
State Subsidies
Take advantage of tax benefits
Guaranteed retirement pension
Basics of the Riester pension: What you need to know
Check eligibility for allowances
Understanding Funding Rates
Suitable Contract Type
Compare Providers
Who benefits most from the Riester pension?
The Riester pension is a state-subsidised retirement savings product that is suitable for a wide range of people in Germany. Families with children can particularly benefit due to the generous child allowances, which significantly reduce personal contributions and increase returns. Low earners can also fare well with Riester, as the state subsidises a large part of the savings performance through allowances and the minimum personal contribution is low. For employees and civil servants, the Riester pension is an attractive supplement to the state pension or pension scheme, helping to close the pension gap in old age. Young professionals receive a one-time bonus and can start building wealth early. Self-employed individuals who voluntarily pay into the state pension scheme, as well as self-employed individuals required to pay pension insurance (e.g. certain craftsmen, artists via the Künstlersozialkasse), can also benefit from the advantages of the Riester subsidy. nextsure helps you analyse your individual situation and determine if and how much you can benefit from the Riester pension.
Retirement planning with a system
Your Riester benefits at a glance
Secure allowances
Make optimal use of state basic and child allowances.
Save taxes
Benefit from attractive tax advantages through the special expense deduction during the savings phase.
Capital guarantee
Your deposited capital and the allowances are guaranteed.
Stay flexible
Adapt your contract to changing life situations.
Wohn-Riester
Take advantage of the funding for your own home.
Family Bonus
Particularly high allowances for families with children.
Secure Pension
Lifetime guaranteed pension payments in retirement.
Provider choice
Find the right Riester contract at nextsure.
Digital-Service
Easy management of your Riester contract online.
State-backed into a secure future
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Your Riester future?
The state subsidies of the Riester pension in detail
State subsidies are the cornerstone of the Riester support system, making this form of pension provision particularly attractive. Every person entitled to subsidies is eligible for an annual basic subsidy of 175 euros. An additional child subsidy is paid for each child eligible for child benefit: For children born before 1 January 2008, this amounts to 185 euros per year, and for children born from 2008 onwards, it's even 300 euros annually. Young professionals who have not yet reached the age of 25 when signing the contract receive a one-time starter bonus of 200 euros. To receive the full subsidies, the saver must make a minimum personal contribution of 4 percent of their previous year's gross income subject to pension insurance (maximum 2,100 euros minus the subsidies to which they are entitled). The minimum base amount is 60 euros per year. The application for subsidies is usually made automatically by the provider; nextsure supports you in accurately applying for and optimising your subsidy claims.
Tax advantages of the Riester pension: How you benefit
In addition to direct state subsidies, the Riester pension offers significant tax advantages during the savings phase. You can claim your total annual contributions, including the subsidies received, up to a maximum of €2,100 (as of 2024) as special expenses in your income tax return. The tax office conducts a so-called favourable check: it compares the amount of subsidies you are entitled to with the tax savings resulting from the deduction as special expenses. If the tax savings exceed the subsidies, the difference will be refunded to you through your tax return. This makes Riester contracts particularly attractive for people with higher incomes and corresponding tax burdens. In return, the benefits from the Riester pension in retirement are subject to deferred taxation, meaning the pension payments must be fully taxed. However, since the personal tax rate in retirement is often lower than during working life, this can result in an additional financial advantage.
Different Types of Riester Contracts: An Overview
The Riester market offers various contract types to meet the differing needs and risk profiles of savers. The classic Riester pension insurance provides high security and guaranteed benefits, often with a conservative capital investment. The unit-linked Riester pension insurance invests contributions in investment funds, offering higher return opportunities but also higher risks; however, a contribution guarantee at the start of the pension is legally required. Riester bank savings plans are a very secure option with variable interest rates, usually based on a reference interest rate and often involving lower costs. For homeowners or those who wish to become one, the Riester building society savings contract or a Riester loan (Wohn-Riester) is of interest, where the subsidies can be used for the construction, purchase, or repayment of a self-used property. Each variant has specific advantages and disadvantages in terms of return, security, and flexibility. Careful examination and advice, as provided by nextsure, is essential for choosing the right product.
Wohn-Riester: Government-Subsidized Homeownership
Wohn-Riester, officially known as the Eigenheimrente, is a special form of the Riester subsidy that allows savers to use government allowances and tax advantages for the purchase, construction, or debt reduction of an owner-occupied property. Eligibility includes both the use of accumulated capital from a Riester contract and the repayment of a loan. The accumulated amounts and allowances are channelled into what is called a housing subsidy account. The benefits are manifold: faster debt reduction, lower interest burden, or more equity when purchasing property. The condition is that the property is owner-occupied and serves as the primary residence. In retirement, the "taxation" of the housing subsidy account takes place either through a one-off payment (with a discount) or through annual instalments until the age of 85. Wohn-Riester is a complex topic, where nextsure helps you understand the opportunities and obligations precisely and utilise them optimally for your property financing.
Occupational disability
Secure income
Rürup Pension
Basic provision
Pflege-Bahr
Protect care
Flexibility with Riester: Adapting to Life Stages
The Riester pension is designed to accompany savers in the long term and therefore offers various options for adapting to changing life circumstances. For instance, you can increase or decrease your monthly contributions to respond to income fluctuations. A complete suspension (dormancy) of the contract is also possible, during which no further allowances are paid, but the capital saved so far remains and continues to earn interest. Changing providers is also generally possible if you are dissatisfied with the terms or performance of your current contract; however, potential costs and deadlines should be considered. At the beginning of the payout phase, there is the option to withdraw up to 30% of the accumulated capital tax-free, while the remainder is converted into an annuity. This flexibility makes the Riester pension an adaptable component of private retirement planning. nextsure is happy to advise you on the best adjustment strategies for your contract.
Riester pension payout: options in retirement
Upon reaching retirement age, your Riester contract offers you various options for the payout of the accumulated capital. The standard option is a lifelong monthly pension payment that provides you with a regular additional income in retirement. Another possibility is the so-called partial capitalization: at the beginning of the payout phase, you can withdraw up to 30 percent of the total capital at once without affecting the subsidies. The remaining amount is then paid out as a lifelong pension. In certain exceptional cases, such as very small pension entitlements (low-value threshold), a full capital payout can be requested, although this often involves repayment of subsidies. Special regulations apply to "taxation" of the residential support account in Wohn-Riester contracts. It is important to inform yourself early about the various payout options to make the decision that suits your personal situation. The experts at nextsure are happy to explain the details to you.
Costs and returns of the Riester pension analysed
The return on a Riester pension comprises the contributions paid, the government allowances, any potential tax advantages, and the generated interest on capital. In contrast, there are costs for concluding and managing the contract, and potentially for fund management. The level of these costs can vary significantly depending on the provider and type of contract and has a substantial impact on the net return. Thanks to the government allowances, the Riester pension can offer an attractive return, especially for low-income earners and families with children, even with conservative investments. With unit-linked products, the return prospects are higher but so are the risks. A transparent presentation of all costs and a realistic assessment of the return potential is crucial. The legal guarantee that at the start of the payout phase, at least the paid contributions and allowances will be available, provides important security. nextsure helps you compare cost structures and evaluate the return prospects of different Riester offers.
Who is eligible for the Riester pension allowance?
To maximise your Riester pension, there are several key aspects to consider. Regularly check that you are receiving the full state allowances. This requires the payment of the minimum personal contribution (4% of the previous year's gross income). Adjust your contributions if your income or family situation changes (e.g. the birth of a child) to make the most of the allowances. Ensure your provider applies for the allowances correctly and promptly. Take advantage of the one-time starter bonus if you are under 25. Regularly compare the terms and performance of your contract with other offers on the market; switching providers can be beneficial. Familiarise yourself with the different investment options (traditional, unit-linked) and choose the one that fits your risk appetite and return objectives. The experts at nextsure are on hand to support you in continuously optimising your Riester pension and adapting it to your life plans.
