Riester pension or independent savings

Riester pension offers benefits and security as advantages

Perhaps you are one of the many millions of German citizens who already have a Riester contract and in this way use the state demand.

• Probably the greatest advantage of the Riesterpension is that all deposits that you make in the granted savings contract are secured. It is guaranteed that you will have at least the net present value of these deposits by the contract maturity and, depending on the Riester contract, there is usually also a certain minimum return guaranteed.

• In addition to the security, the second major advantage is that you receive state allowances for free. On the one hand, this is always the basic allowance, which is a maximum of 154 euros per year and person. On the other hand, you can also receive a child allowance for minor children who live in the household. This is either 300 euros (child born from 2008) or 185 euros per year if your child is by December 31st. 2007 was born.

• You can therefore benefit in particular Familys, because a family of four, whose children were both born in 2008 at the earliest, can receive a total of 908 euros in funding annually.

• In addition to the advantages, Riester savings contracts also have disadvantages. One disadvantage is the very long term, because the contracts can only start at your 60th birthday at the earliest. End of the year of life. Early disposals are generally possible, but you then have to repay all government allowances received and you would not have a capital guarantee.


The Riester pension and its disadvantages - what to look out for

State funding for private old-age provision has not only exclusively ...

• Another point of criticism is the relatively high fees that exist for various Riester products. This applies to Riesterfonds, for example, because the costs we are often higher for you as a saver than with ordinary open-ended Fundsyou regardless of the Riester pension as part of a fund savings plan.

• Some savers also find it a disadvantage that the state allowances cannot flow into a capital life insurance. This product cannot be used in the course of the Riester pension, but you can only choose between a bank savings plan and a private one pension insurance, a fund savings plan and a Riester home loan savings contract.

Flexibility and lower costs speak in favor of independent saving

• The listed disadvantages of the Riester pension also indirectly represent the essential advantages from which you can benefit when saving independently of the state demands. For example, the costs of many independent savings products are often lower than those of Riester contracts.

• A great advantage of independent saving is the high degree of flexibility, which in principle does not exist at all with the Riester pension. In many cases, you can easily terminate the savings contract, change the savings rates or make reallocations at any time. In addition, you can also use endowment life insurance, for example, to regularly build up your wealth.

• The disadvantage of saving that is independent of the Riester subsidy is that - depending on the product selected - there is not always a capital guarantee. In addition, you will of course forego free money, which can amount to a not inconsiderable amount per year, especially if you have children. A family of four, for example, may forego 9,000 euros in government funding in ten years.

• In principle, every saver has to decide for himself whether a Riester savings contract or savings that are independent of the state are the better alternative. Therefore, it often depends, for example, on whether security or flexibility is more important to you and how much you could receive the allowances.