Riester For Families: Why Old-Age Provision Is Particularly Worthwhile For Families

The statutory pension will probably only be sufficient in very few cases. Especially if you are planning a family or already have one, you should make provisions for your retirement in other ways.

You can do this, for example, with a company pension, private pension insurance or a riester pension. The latter option is particularly interesting, as riester pensions are subsidized by the state.

Families with children in particular can benefit from this state-subsidized pension. We will show you why riester can be worthwhile for your family, because it is never too late to think about old age.

The Statutory Pension Is Often Not Enough

You work almost 40 years of your life and usually pay into the statutory pension fund, unless you are self-employed or for other reasons. Although you pay a large part of your gross salary into the statutory pension fund every month, the pension will probably not be sufficient.

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For your retirement, you should have about 75 to 80 percent of your last gross salary available each month to maintain your standard of living.

However, the current pension level is less than 48 percent. Therefore, you should make provisions in other ways to close this pension gap, such as by setting up a riester pension.

A Brief History Of The Riester Pension

The Riester pension was launched in 2002. The reason was a reform of the statutory pension insurance. The pension level was to be lowered so that the pension insurance would still be affordable for younger generations. The resulting gap is to be closed, for example, with the riester pension.

This concept is based on the three-pillar system of pension insurance in Germany. This is made up of “standard state pensions,” “company pensions” and “private pensions,” which includes the riester pension. In the future, it will probably be the case that the last two points will become more and more important in order to secure your retirement.

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With Riester pensions, you can take out corresponding contracts with various providers. You pay in a monthly or annual amount based on your income.

You can receive annual subsidies of up to 175 euros from the state on top of this, but only if you pay the minimum amount, which depends on your income. It amounts to 4 percent of your previous year’s income. In addition, you enjoy tax advantages with a riester pension.

Who Is Allowed To Take Out A Riester Pension?

In principle, you can take out a riester pension if you pay into the statutory pension. Even if you are still studying, you may take out a riester contract. If you do so before the age of 25, you will even receive a so-called newcomer bonus.

However, it is more difficult for self-employed persons and civil servants who do not pay into the statutory pension scheme to take out a riester contract. However, it is still possible to get into a contract through your spouse.

This Makes It All The More Worthwhile For Families

Families in particular can benefit even more from the riester pension. Not only can they enjoy the 175 euro subsidy per year, but also the child allowance, which is available for each child.

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If you have a child, you get an additional 300 euros, provided it was born after 2008. If it was born before then, you still get 185 euros. This allowance increases with each additional child.

If you are a single parent and have a low income, riester can be even more worthwhile for you. Since the minimum amount is based on your income, you will receive the subsidies for a lower monthly amount.

The child allowance was introduced because mothers or fathers often only work part-time or not at all due to raising children and are therefore less able to provide for their old age. In addition, children can cost a lot of money. For this reason, parents should be less disadvantaged in terms of pensions.

Different Forms Of The Riester Pension

The Riester pension comes in various forms. The most popular is probably the classic contract. You pay a monthly amount into your contract.

This gives you security and you can already foresee how high your later pension will be. However, you can hardly expect a large return due to the ongoing low-interest phase.

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In addition to a normal contract, you have the option of taking out a unit-linked riester pension. You are guaranteed to get your paid-in contributions back, and you also have the option of increasing your returns.

Another very popular option is the “wohn-riester”. If you are planning to move into your own home with your family anyway, you can finance the property with a riester contract. However, the “wohn-riestern” is linked to certain conditions.

Other Ways To Provide For Your Old Age

In addition to Riester, you have other options to provide for your retirement:

  • Private Pension Insurance
  • Company Pension
  • Savings Plans
  • Rürup Pension
  • Real Estate


You cannot start early enough to make private provisions for your old age. For parents, the Riester pension is particularly suitable, as it is not only state and tax-subsidized, but there are also high allowances for each child.

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