Riester Pension (ETF) | Insurance Broker Daniel Hüsken

The Riester pension has been the foundation of state-subsidized retirement savings for families for decades. Even after the launch of the new Pension Depot in 2027, it remains a key pillar: thanks to legal grandfathering rules, savers secure lifelong subsidies and a full capital guarantee. It is the ideal model for those who prioritize maximum security for their family. (Note: New contracts are legally possible until Dec 31, 2026).

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At a glance:

Key Facts at a Glance

What it provides	State subsidies of €175 per year plus child allowances, tax advantages and a lifelong pension with a 100% contribution guarantee.
Limits and drawbacks	New contracts only until 31 December 2026, high costs of many contracts, mandatory annuitisation and the guarantee as a brake on returns. Details
Who needs it	Today mainly for existing contracts: families with children in particular continue to benefit from the subsidies.
What does it cost	It depends on your personal situation. I will gladly prepare a non-binding quote for you: get in touch.
What to look out for	Check the costs of your existing contract, the minimum own contribution for full subsidies and a possible switch to the Pension Depot from 2027.

Sarah's Story: State subsidies from the state for her children

Fictional example for illustration; all persons and events are invented.

Sarah moved to Germany for her job. Now she has two young children. She wanted to save for her retirement but also wanted to be safe. "Is Riester worth it for an expat?" she asked me.

We did the math: With two children, Sarah gets €775 every year from the government (€175 basic allowance plus €300 for each child). Over 20 years, that is over €15,000 that she does not have to save herself.

We chose a modern plan where this extra money goes directly into ETFs. This way, Sarah has the safety of a guaranteed pension and the growth of the global market. Sarah says: "It feels good to know the state is helping me build a future for my family here."

Why Riester is still a great choice for Expats in Germany

The Riester pension has some unique benefits that make it very attractive, especially for families:

State Subsidies: You get cash every year for yourself and each child.
Tax Savings: You can get money back when you do your tax return.
100% Safety: The law says your saved money is 100% guaranteed.
ETF Growth: Modern plans let you invest in the stock market for higher returns.

Tax Advantages for High Earners

If you earn a good salary, Riester has another "turbo" effect. You can tell the tax office about your contributions. They check if you should get more money back through tax savings than you got through the subsidies. If yes, you get the difference back.

This makes Riester one of the few ways in Germany to reduce your tax while saving for yourself. In our Remote consultation, we look at your situation and find the best way to combine subsidies and tax savings.

Requirements for Expats

Valid German Address (Anmeldung)
German Bank Account (IBAN)
German Tax ID

Limits and Drawbacks

Riester was the standard solution for a long time. This is what you should know today:

Phase-out: From 2027, the Pension Depot replaces Riester for new savers; existing contracts are grandfathered.
Costs: Many contracts have high effective costs that eat up a large part of the subsidies.
Guarantee: The 100% contribution guarantee limits the equity share and therefore the return potential.
Harmful use: If you withdraw the balance before retirement outside the permitted cases, you must repay subsidies and tax benefits.

Frequently Asked Questions

Is the Riester pension being discontinued?

Yes and no. New Riester contracts can only be signed until December 31, 2026. After this deadline, it will be replaced by the more modern Pension Depot. However, all existing contracts are fully protected (grandfathering) and can be continued for life with all subsidies and tax benefits intact.

Who can still benefit from a Riester pension today?

Riester is very good for families with children because of the high subsidies (€300 per child born from 2008). People with a high income also benefit from tax savings within their tax return.

How high are the government subsidies exactly?

The basic subsidy is €175 per year per person. For each child born from 2008 onwards, you get an additional €300 annually (€185 for children born before 2008). One parent with two children born from 2008 receives €775 per year from the state, and if both parents each save in their own contract, they receive €950 per year in total.

How much do I need to pay to get the full Riester subsidies?

To get the full subsidies, you must contribute at least 4% of your previous year's gross income subject to pension insurance (minus your state subsidies) into the contract each year. The maximum supported total amount is €2,100 per year including the government subsidies (meaning your maximum personal contribution is €2,100 minus the subsidies). If you pay less than the required amount, the subsidies will be reduced proportionally.

Is my money safe with Riester?

Yes, Riester contracts have a 100% guarantee by law. This means all your own contributions and the government subsidies must be available for your pension when you retire. This offers a very high level of security.

Can I also invest in Riester with ETFs?

Yes! Modern Riester plans use ETFs. This way, you combine government money with the growth of the global stock market. You get the safety of the guarantee and the chance for better returns.

What happens if I change my job or become unemployed?

The Riester contract is personal. You can take it with you when you change jobs. If you are unemployed or on parental leave, you can pay a very small amount (like €60 per year) and still get the full subsidies.

Do I have to pay tax on the Riester pension in old age?

Yes, the payouts are taxed later. But since your tax rate in retirement is usually lower than when you work, you still save money overall. You use your high tax rate now to get savings and pay a low rate later.

Guides:

→ The New German Altersvorsorgedepot from 2027 → Cancel, Keep or Transfer Your Riester Plan? → Contract Check: Checking Old Tariffs

Legal Note: The information provided here is for general educational purposes, non-binding information, and orientation. It does not constitute individual advice or a binding offer. The content is carefully researched and regularly reviewed but does not replace individual advice. For my personal advice, I am liable within the scope of my duties as an insurance broker. Insurance conditions may vary. For protection matched to your situation, a personal or digital consultation is recommended.

Riester Pension: The Established Classic with a 100% Guarantee