Riester pension
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Why is the Riester pension important?
Individual market analyses, specifically tailored to your needs
Tailored to requirements
Our focus areas in the field of Riester pensions:
- We assess the suitability of the Riester pension as an optimal retirement savings solution.
- We maximize government funding for you
- We will help you choose the right type of investment.
- We provide security for your surviving family members.
- Our qualified insurance advisors offer you detailed and individual advice.
How does the Riester pension work and what are its distinguishing features?
The Riester pension is a state-subsidized private retirement savings plan in Germany. Subsidies are provided through allowances and special expense deductions in accordance with the provisions of the Retirement Savings Act (AVmG) of 2002, which is regulated in Sections 10a and 79 et seq. of the Income Tax Act. The term "Riester pension" originates from Walter Riester, the former Federal Minister of Labor and Social Affairs, who conceived the idea of promoting voluntary retirement savings through a retirement savings allowance. The Riester pension was introduced as part of the 2000/2001 pension reform, which reduced the net pension level of the standard pensioner—a typical employee subject to social security contributions with 45 years of contributions—from €701,300 to €671,300. The term "Riester" is used in many publications to describe the use of these subsidized retirement savings contracts.
The Riester pension is an excellent way to close the pension gap in retirement. Although the returns on the Riester pension itself may be lower, government subsidies and tax savings offer returns that are difficult to achieve with other products. The sheer number of Riester pension plans on the market is almost overwhelming. In addition to choosing from a wide variety of tariffs, you also have to make fundamental decisions about different investment options. Should it be a fund savings plan, a unit-linked pension insurance, or a traditional pension insurance policy? You should always keep the government subsidies in mind. Our independent insurance/financial advisors will be happy to explain in detail how high the individual subsidies are.
Your contact persons
Your contact persons
Subject areas
Subject areas
What we should pay particular attention to regarding the Riester pension
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Individual consultation on the topic of Riester pensionWhen advising on Riester pensions, we place great emphasis on the individual needs and goals of our clients. Every client has different financial and personal circumstances, so it is important to offer tailored solutions that fit their specific requirements.
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Eligibility checkWe carefully check whether our clients meet the requirements to benefit from the government subsidies and tax advantages of the Riester pension. The Riester pension is primarily aimed at certain groups of people, such as employees, civil servants, and the self-employed.
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Selecting a suitable providerThere are many providers of Riester pension contracts on the market. We support our clients in selecting a reputable and trustworthy provider that meets their long-term needs. In doing so, we consider criteria such as the quality of the contract terms, flexibility, cost structures, and customer service.
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Flexibility and adaptabilityRiester pension contracts should be flexible to adapt to the changing needs of our customers. We ensure that the chosen contracts offer sufficient options, such as the ability to adjust contributions, make special payments, or individually determine the pension start date and amount.
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Transparent information on the cost structureWe provide our customers with transparent information about the cost structure of Riester contracts. This includes, for example, setup costs, administration fees, and any commissions. We explain how these costs affect the return and help our customers understand the long-term implications.
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Consideration of the individual risk profile and investment strategyWe take into account the individual risk profile of our clients and advise them accordingly when selecting an investment strategy. Depending on risk tolerance and time horizon, Riester contracts offer various investment options such as classic pension insurance, unit-linked insurance, or bank savings plans.
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Regular review and adjustmentWe recommend that our customers regularly review their Riester pension and adjust it if necessary. Life circumstances change over time, so it's important to ensure that the contract meets the customer's current needs and goals.
Frequently Asked Questions (FAQ)
Depending on the type of complaint or question, different contact persons are available to you:
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If you are dissatisfied with the amount of your Riester subsidy, you can first contact your Riester contract provider. They will forward your complaint to the Central Agency for Retirement Savings Subsidies. You can then appeal the agency's decision.
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If you wish to complain about the provider's conduct, you can contact the ombudsmen for the insurance and banking sectors. They act as neutral arbitration bodies and can mediate in conflicts between customers and providers.
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If the provider violates laws and regulatory rules, you can contact the Federal Financial Supervisory Authority (BaFin). BaFin is the supervisory authority for banks and insurance companies and can intervene in such cases.
For up to two contracts per year, there is the option to apply for a subsidy. The allocation of the subsidy takes into account the ratio of contributions paid to these contracts.
The care allowance paid by the long-term care insurance fund is not considered part of the income subject to social security contributions and is therefore not taken into account when calculating the personal contribution for the Riester subsidy.
To receive the full subsidy, your personal contribution must generally amount to 4 percent of your income subject to social security contributions. If the care allowance is your only income, you only need to pay the minimum contribution of €60 per year to receive the full subsidy. However, it is important to ensure that the subsidy office is informed about the care allowance to avoid any potential misunderstandings.
Yes, sick pay is taken into account when calculating your contribution to the Riester pension scheme. Wage replacement benefits such as sick pay are also included when determining the minimum contribution of 4 percent of your income subject to social security contributions. If you received sick pay during your illness, it will be considered part of your income. Therefore, it is important to adjust your contribution accordingly to receive the full subsidy.
What happens to Riester pension contracts in the event of a divorce?
Riester pension contracts are subject to pension equalization in the event of a divorce. This means that all pension entitlements acquired during the marriage are divided equally between the spouses. This regulation also applies to Riester contracts. The exact distribution of the entitlements is determined within the framework of pension equalization and depends on the individual circumstances. The so-called marital share is calculated, which represents the value of the contract acquired during the marriage. This share is then divided equally between the spouses.
Can I use my Riester pension savings to buy a property?
Yes, the Riester savings from a savings contract can be used to finance the purchase of a home for personal use. This use of Riester funds is permitted.
Who is entitled to Riester subsidies, both directly and indirectly?
Those eligible for Riester subsidies are individuals who pay mandatory contributions to the statutory pension insurance scheme. This includes employees, individuals on parental leave, caregivers, people with disabilities working in sheltered workshops, marginally employed individuals, recipients of unemployment or sickness benefits, and self-employed individuals subject to compulsory insurance.
In addition, spouses are entitled to funding if one of them is eligible for allowances or – in the case of death – was eligible for allowances. Public sector employees and active civil servants can also benefit from the funding.
However, those voluntarily insured in the statutory pension insurance scheme and those compulsorily insured in professional pension schemes are not eligible. It is important to check the individual requirements to determine whether one is entitled to Riester subsidies.
Yes, to receive more money as a pension over time than you initially paid in, you do indeed need to reach a ripe old age. This applies to all pension insurance policies that guarantee a lifelong pension. Average life expectancy plays a significant role in this.
In contracts certified before the end of 2004, it was only possible to make a partial lump-sum payment of up to 20 percent at the start of the pension. A change in the law in 2005 raised this limit to 30 percent. However, the exact conditions vary depending on the specific terms and conditions of the individual provider.
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