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Is a Riester contract worth it?

2022-01-27T13:58:55.111Z


Is a Riester contract worth it? Created: 2022-01-27Updated: 2022-01-27 14:51 Anyone who is no longer satisfied with their Riester contract should not terminate it immediately. © Christin Klose/dpa-tmn The reputation of the Riester pension has suffered. Critics complain about low payouts and high costs. The stock of contracts is no longer growing. There are fewer and fewer offers. Is it all stil


Is a Riester contract worth it?

Created: 2022-01-27Updated: 2022-01-27 14:51

Anyone who is no longer satisfied with their Riester contract should not terminate it immediately.

© Christin Klose/dpa-tmn

The reputation of the Riester pension has suffered.

Critics complain about low payouts and high costs.

The stock of contracts is no longer growing.

There are fewer and fewer offers.

Is it all still worth it?

Berlin - One thing is clear: the statutory pension alone will not be enough for many in old age to maintain their standard of living.

This means that additional private provision is needed to close the expected pension gap.

The Riester pension was introduced just over 20 years ago to support private old-age provision.

But the subsidized old-age provision is apparently no longer well received.

According to surveys by the Federal Ministry of Social Affairs, the number of contracts seems to have stagnated for some time.

"It's now difficult to find a new contract," says Axel Kleinlein from the Association of Insured Persons in Hamburg.

Because many providers are withdrawing from the business.

This is not necessarily surprising for Britta Langenberg.

"20 years of the Riester pension are also 20 years of wasted opportunities for better private old-age provision," criticizes the pensions expert from the Finanzwende citizens' movement.

"In Germany, the Riester pension has been screwed around for far too long, and little has changed in core problems such as the high costs."

Savers get funding

Many Riester contracts in this country are insurance contracts.

The industry recorded an increase of twelve percent in new business last year to 310,500 new contracts, as the General Association of the German Insurance Industry (GDV) announced on Thursday.

The portfolio thus remained largely stable at around 10.4 million contracts.

From the point of view of the association, subsidized old-age provision is not only widespread, but also works.

The association explains that anyone who pays into a contract as planned can expect a pension increase of around 20 percent.

In principle, the state supports Riester contracts with 175 euros per year, explains the Hamburg consumer advice center.

Parents also get 185 euros per year for every child born before 2008 and 300 euros for children born since 2008.

If you are younger than 25 when you sign the contract, you will also receive a one-time bonus of 200 euros.

Own deposits are lower

If you want to receive Riester allowances, you have to pay in savings amounting to 4 percent of your gross income in the previous year.

However, the allowances are deducted from this, so that your own payments are lower.

From the point of view of consumer advocates, contracts are particularly worthwhile when the subsidy is high, for example for families with several children.

Low earners could also benefit from the subsidy.

And according to the Hamburg consumer advice center, Riester can be lucrative for high earners because they can alternatively also deduct their savings contributions from taxes.

Don't cancel the old contract right away

However, Axel Kleinlein would not sign a new contract at the moment.

The BdV board criticizes that insurance companies in particular are currently calculating with very high life expectancies.

At the end of the term, customers would therefore often be paid “pocket money in the best case”.

Before the contract is concluded, an offer should always be thoroughly checked by an independent expert.

Central question: "What does the insurance promise?"

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Anyone who still has a contract but is dissatisfied with it should not terminate it immediately.

"In that case, the funding has to be repaid," says Axel Kleinlein.

"Therefore, the exemption from contributions is the method of choice."

According to Britta Langenberg, subsidized old-age provision should be reformed if possible.

"So that people have more money left over for old age, a change of course must be made now," says the expert.

Other countries such as Sweden have shown how things can be done better with a cost-effective and state-organized offer.

"A restart is overdue." dpa

Source: merkur

All life articles on 2022-01-27

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