Retirement
The Riester pension is a government-subsidised private pension for employees, supported by allowances and tax benefits.
The Riester pension is a private, government-subsidised form of retirement provision. Named after the former Labour Minister Walter Riester, it is aimed primarily at employees and civil servants.
The support comprises a basic allowance of 175 EUR per year, a child allowance of 300 EUR per child (born from 2008), and tax deductibility of up to 2,100 EUR. The own contribution is generally 4% of gross income (less the allowances).
Common criticisms are the high costs, the modest return dampened by the capital guarantee, the complexity, and the deferred taxation. For many investors an ETF savings plan is the more cost-effective and flexible alternative, depending on individual circumstances.
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