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How does the Riester pension work? Private old-age provision simply explained


Future retirees should start thinking about their retirement provision at an early stage. Seniors can secure a number of advantages with the Riester pension.

Future retirees should start thinking about their retirement provision at an early stage.

Seniors can secure a number of advantages with the Riester pension.

Hamburg – Even if the current statutory retirement age of 65 still seems some time away, consumers in Germany should start thinking about old-age provision at an early stage.

The Riester pension offers a number of advantages, as reported



But how does the Riester pension actually work for future pensioners?

Social insurance:

German pension insurance


October 1, 2005


56.7 million (December 31, 2020)


21.2 million (as of July 1, 2022)

Private old-age provision for pensioners: how does the Riester pension work?

The Riester pension is a state subsidy and is used for old-age provision.

According to the German pension insurance, this is intended to close gaps in pension provision in old age.

Consumers can pay part of their income into the Riester pension, which later leads to a pension that is paid out for life.

The Riester pension is particularly attractive for low-income families, young professionals, sole earners with families, but also for higher incomes.

But who is later entitled to a Riester pension as a pensioner?


Consumers should deal with their old-age provision in good time – with the Riester pension.

© Sascha Steinach/Imago (symbol image)

All consumers in Germany who are subject to compulsory pension insurance are entitled to the Riester pension.

There are also civil servants, recipients of disability pensions, people who are permanently disabled, recipients of basic income, mini-jobbers who pay into the pension insurance system and parents on parental leave.

Consumers who are interested in the Riester pension should find out about the different forms.

The classic Riester pension insurance ensures a lifelong payment phase, but is not the only option.

In addition, there are other forms of money Riester and residential Riester.

With the Riester pension, future pensioners receive allowances from the state

With Geld-Riester, consumers receive savings contracts from which a lifelong pension is paid from the start of retirement.

You can choose between bank savings plans, investment funds and building society contracts.

Wohn-Riester was introduced in 2008.

As a result, no rent should have to be paid in old age – the cost of living will decrease.

The living space financed by the consumer must be used by the consumer himself.

Anyone who signs a contract for a Riester pension receives various allowances from the state every year.

Each saver receives 175 basic allowance for each year that is paid into the Riester pension.

There is a one-off bonus of 250 euros for career starters if the contract is concluded before their 25th birthday.

There is also an allowance for each child.

The state pays 185 euros for children born before 2008, and a whopping 300 euros for every child born after 2008 – as long as child benefit is paid.

The amount to be paid in by the consumer depends on their own income.

If you want to receive the full subsidy, you have to pay four percent of your gross income from the previous year into the Riester pension.

The contribution can be a maximum of 2100 euros.

When is the Riester pension paid out for pensioners?

The Riester pension is paid out when the statutory retirement age has been reached.

That will be 65 years and ten months in 2023.

However, the Riester pension can be paid out as a pensioner at the age of 62.

How can I have my Riester pension paid out?

On the one hand, this is possible as a lifelong pension, which is paid out monthly.

As a second variant, 30 percent of the savings amount can be paid out directly, the rest is then treated as a pension.

Under certain circumstances, the entire amount can even be paid out directly if the pension is very low.

Possible payment of the Riester pension as a pensioner:

  • Life annuity

  • Payment of up to 30 percent of the amount paid in - the rest as a lifelong pension

  • Direct payment of the full amount for low income

  • Repayment of the remaining debt for home ownership

Anyone who signed the Riester contract before 2012 can even have their pension paid out from the age of 60.

In order to find the best Riester contract for your own needs, information should be collected from various agencies.

A consultation with the German pension insurance is also an option.

The payment of the Riester pension for pensioners includes the entire savings plus the allowances from the state.

This is of particular interest to consumers who would like to receive a payment from the Riester pension in addition to the statutory old-age pension.

List of rubrics: © Sascha Steinach/Imago (symbol image)

Source: merkur

All life articles on 2023-01-27

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