What is Riester-Rente?
The Riester-Rente is a state-subsidized private pension plan introduced in Germany to help supplement the statutory pension. It's particularly attractive for employees, civil servants, and families with children.
How Riester Subsidies Work
Basic allowance: €175 per year per adult
Child allowance:
Under-25 bonus: €200 one-time bonus for contracts started before age 25
Contribution Requirements
To receive full subsidies, you must contribute 4% of your previous year's gross income (minimum €60/year). The government allowances count toward this target.
Tax Benefits
Riester contributions are tax-deductible up to €2,100 per year. The tax office automatically calculates whether the subsidy or tax deduction is more beneficial and applies the better option.
Example Calculation
Scenario: Married couple, combined income €60,000, two children (born 2015 and 2018)
Payout Phase
Riester pensions must be paid out as lifetime annuities starting at age 62 or later. Up to 30% can be taken as a lump sum at retirement.