Is the old-age provision worthwhile with the Riester pension?

With good old-age provision you can enjoy retirement.
Image: Jens Gyarmaty

Low interest rates, short-time work and fewer and fewer providers: the Riester pension is controversial. But when should you keep your contract at all – and what do you have to consider?

D.he Riester pension was a sensation at the time. With it, the government introduced private, state-sponsored old-age provision in 2002. With the support of the state, investors should make private provisions for old age and thus compensate for falling payments in the statutory pension. In the first few years after its introduction, the Riester pension set one record after another. The number of deals rose steadily. There was a large selection of subsidized bank and fund savings plans as well as insurance products. In 2008, Wohn-Riester added real estate loans and home loan and savings contracts. But what was once preparing to become a successful model is currently in crisis.

The closing numbers have stagnated for years. Since 2018 these have even decreased. There were 16.48 million contracts in the first quarter of 2020. According to estimates by the Federal Ministry of Labor and Social Affairs, a good fifth has stopped paying into the contract. After all, a number of contracts have turned out to be very expensive. The Riester pension is also a bureaucratic monster. Many investors fail because of the allowance application or the offsetting in the tax return – even today, although the permanent allowance application was introduced years ago.


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