Riester-Rente
Riester-Rente is a pension contract with state subsidies (Zulagen): up to €950 a year for a family with two children (2026). New contracts can only be signed until December 31, 2026; from 2027 the Altersvorsorgedepot (subsidised retirement depot) takes its place. The main risk for mobile professionals is repaying the subsidies (Schädliche Verwendung) if you live outside the EU/EEA during the payout phase.
How It Works
You make contributions → the state adds subsidies (Zulagen) and tax deductions. For full subsidies, your contribution plus the subsidies must reach 4% of the previous year's gross income subject to pension contributions; your own part must be at least €60 a year [1]. The tax deduction is capped at €2,100 a year including subsidies (2026).
Subsidies
Amounts for old-style contracts, 2026:
| Type | Amount per Year |
|---|---|
| Basic (Grundzulage) | €175 |
| Per child born before 2008 | €185 |
| Per child born from 2008 | €300 |
| Bonus for young (contract signed before turning 25) | €200 (one time) |
Example: family with 2 children (after 2008) receives €175 + €175 + €300 + €300 = €950/year in subsidies.
Who Can Participate
- Employees paying into Rentenversicherung (statutory pension insurance)
- Beamte (civil servants)
- Spouses of participants (mittelbar förderberechtigt, indirectly eligible)
Self-employed usually cannot participate. The exception is self-employed people with compulsory pension insurance, such as artists and writers insured through the Künstlersozialkasse; voluntary contributions do not qualify. The Altersvorsorgedepot opens to the self-employed on January 1, 2027.
Evaluation Criteria
| Factor | For Riester | Against Riester |
|---|---|---|
| Family situation | Families with children (high subsidies) | Singles without children (only the €175 subsidy) |
| Income | Low/medium (subsidies make up a large share) | High (tax deduction capped at €2,100) |
| Mobility | You plan to retire in the EU/EEA | You may end up outside the EU/EEA in retirement |
| Flexibility | — | Money locked until 62, mandatory annuity |
| Fees | Bank Sparpläne with low fees | Insurance products: fees are usually higher |
Pros
- Guaranteed subsidies: up to €950 a year for a family
- Tax deductions: up to €2,100 a year
- Contribution guarantee (nominal)
Cons
| Con | Description |
|---|---|
| Low returns | Guarantee = conservative investments |
| High fees | Many products are expensive |
| Limited flexibility | Money locked until age 62 (for contracts from 2012; for pre-2012 contracts — from age 60) |
| Taxable payouts | Pension is taxed |
| Mandatory annuity | At most 30% as a lump sum |
What Happens If You Retire Outside the EU (Schädliche Verwendung)
If you live outside the EU/EEA during the payout phase — from its start or after moving later (e.g., to the USA, UK, Switzerland, or your home country outside Europe) [8]:
| Consequence | Detail |
|---|---|
| Repayment required | All state subsidies (Zulagen) must be repaid |
| Tax benefits clawed back | All tax deductions received during contract lifetime |
| Classification | "Schädliche Verwendung" (harmful use) |
| How to repay | On application to the ZfA (Zentrale Zulagenstelle für Altersvermögen, the central subsidy office), repayment is deferred (Stundung) and paid off interest-free by withholding 15% of each payout |
Changes Since 2023
Since January 1, 2023, the rules have changed:
- Moving outside the EU/EEA during the accumulation phase no longer triggers repayment
- "Schädliche Verwendung" applies if you live in a third country during the payout phase: from its start or after moving later
- Deferral for the accumulation phase is no longer needed; in the payout phase, repayment on application is made by withholding 15% of each monthly pension payment
If there is a realistic probability of leaving the EU permanently, the repayment mechanism and its bureaucratic burden typically erode the subsidy advantage. Run the comparison against alternatives that don't depend on where you live (bAV with employer matching, ETF Sparplan) before signing.
Alternatives
- ETF Sparplan in a regular Depot: full flexibility, no tie to your country of residence
- Rürup-Rente for the self-employed with high income: deduction up to €30,826 a year (2026), a combined cap with statutory pension contributions
The number of Riester contracts is falling (BMF statistics through 2024) [7]. The Altersvorsorgereformgesetz (private pension reform act) is law: Bundestag March 27, Bundesrat May 8, published May 29, 2026 [2][3]. From January 1, 2027:
- no new old-style Riester contracts can be signed; existing ones keep the old rules (Bestandsschutz) or can switch to the new products without repaying subsidies received;
- the Altersvorsorgedepot (retirement depot) starts, without capital guarantee: ETFs, funds, bonds; in the Standarddepot (standard depot of preselected funds) costs are capped at 1% a year;
- Grundzulage (basic subsidy): 50 cents per euro of own contributions up to €360, then 25 cents per euro from €360 to €1,800 — maximum €540 a year; minimum contribution €120 a year;
- Kinderzulage (child subsidy): one euro per euro of own contributions, up to €300 per child a year;
- the self-employed become eligible too;
- payouts start at 65 at the earliest.
The Frühstart-Rente (the state pays €10 a month into a depot for each child aged 6 to 18) is not law yet: the cabinet approved the bill on August 12, 2026 and the Bundestag held its first reading on September 25. The planned start is January 1, 2027.
FAQ
Not legal or financial advice.
I have a Blue Card and might move to the US in 5 years — is Riester a trap for me?
Moving to the US during the savings phase triggers no repayment: since January 2023, what counts is where you live during the payout phase. If you live in a third country in retirement — from the start of payouts or after moving later — Schädliche Verwendung (harmful use) applies: you repay all Zulagen (subsidies) and the tax savings. On application, repayment is deferred and paid off by withholding 15% of each monthly payout. After 5 years of contributions the subsidies are modest, while the money stays locked until 62. A new old-style contract can only be signed until the end of 2026. For comparison: employer matching in bAV (betriebliche Altersvorsorge — company pension) is also locked until retirement but doesn't depend on where you live; an ETF Sparplan is accessible at any time. If retiring outside the EU is likely, the opportunity cost of locked capital with repayment risk usually outweighs the subsidy.
My spouse doesn't work — can they still receive Riester subsidies?
Yes, through mittelbare Förderberechtigung (indirect subsidy eligibility). If one spouse is directly eligible (employed, paying into Rentenversicherung — statutory pension insurance), the non-working spouse can open their own Riester contract with a minimum contribution of €60/year and receive the full Grundzulage (basic subsidy, €175) plus Kinderzulagen (child subsidies) if children are assigned to that parent. Requirements: marriage, spouses not living permanently apart, both living in the EU/EEA, and the directly eligible spouse paying the full minimum contribution — 4% of their gross income, counting both spouses' subsidies [9]. An old-style contract can only be signed until December 31, 2026. The non-working spouse's own contribution is €60 a year (€5 a month): €175 Grundzulage on €60 of own contribution — a subsidy almost three times the contribution.
I already signed a Riester contract with high fees — what now?
Four options to evaluate. (1) Beitragsfrei stellen (make contribution-free): stop paying contributions, keep the contract dormant. You lose future subsidies but avoid further fee drain. The guaranteed capital (Beitragserhalt — contribution preservation) at retirement age is preserved. (2) Anbieterwechsel (provider switch): transfer the accumulated capital to a cheaper Riester product (e.g., a bank Sparplan instead of an insurance contract). The old provider may charge a transfer fee, and the new provider may have a waiting period. (3) Schädliche Kündigung (harmful termination): cancel the contract entirely, return all subsidies and tax benefits, keep the remaining capital minus fees. This option is rarely beneficial — the reclaimed subsidies and taxes typically exceed the remaining capital. (4) From 2027 — transfer the accumulated capital into an Altersvorsorgedepot without repaying the subsidies received. A Honorarberater (fee-only advisor) can calculate the break-even point for your specific contract.
Can I use Riester to buy a home (Wohn-Riester)?
Yes. Wohn-Riester allows using accumulated Riester capital (or future contributions) for purchasing owner-occupied residential property. Options: (1) withdraw the entire Riester balance for a down payment (Altersvorsorge-Eigenheimbetrag — retirement provision home equity amount), (2) use contributions to pay off a qualifying mortgage, or (3) combine both. The withdrawn amount goes into a virtual Wohnförderkonto (housing subsidy account) that grows by 2% a year until the end of 2026; the reform abolishes this increase from 2027. At retirement, the Wohnförderkonto balance is taxed as income — either spread over 17–25 years or as a lump sum with a 30% discount. Key restriction: the property must be owner-occupied and in Germany (or EU/EEA). If you sell the property and do not reinvest in another qualifying home within a defined period, Schädliche Verwendung (harmful use) applies.
The reform is now law — sign an old-style Riester contract in 2026 or wait for 2027?
The reform passed the Bundestag on March 27, 2026 and the Bundesrat on May 8, 2026. From January 1, 2027, only the new products (including the ETF-capable Altersvorsorgedepot without capital guarantee) can be newly signed; old-style Riester contracts signed before that date are grandfathered with the current subsidy rules (€175 Grundzulage, €300 Kinderzulage). Factors for the timing decision: (1) the new Grundzulage (up to €540/year, contribution-proportional) is higher than the old €175, while the new child subsidy (up to €300, requiring own contributions) mirrors the old one; (2) the new products drop the 100% capital guarantee, allowing higher expected returns at higher risk; (3) signing an old-style contract in 2026 locks in the guarantee model but typically also old cost structures; (4) a voluntary switch from an existing contract to the new products is possible from 2027 without repaying subsidies. Timing is secondary: the first question is whether subsidized retirement saving fits you at all — see the relocation warning above.
Sources
- Deutsche Rentenversicherung — Riester-Rente: staatliche Förderung (Zulagen €175 / €185 / €300 / €200, minimum contribution 4%, at least €60), https://riester.deutsche-rentenversicherung.de/DE/Lohnt-sich-Riester/Staatliche-Foerderung-fuer-Sie/staatliche-foerderung-fuer-sie_node.html (2026)
- Bundesministerium der Finanzen — FAQ zur Reform der geförderten privaten Altersvorsorge (Grundzulage 50 cents per euro up to €360 and 25 cents up to €1,800, Kinderzulage up to €300, minimum €120, Standarddepot cost cap 1%, payouts from 65, Bestandsschutz), https://www.bundesfinanzministerium.de/Content/DE/FAQ/reform-der-privaten-altersvorsorge.html (2026)
- Deutsche Rentenversicherung — Bundesrat billigt Reform der privaten Altersvorsorge (08.05.2026); law published 29.05.2026, BGBl. 2026 I Nr. 156, https://www.deutsche-rentenversicherung.de/DRV/DE/Ueber-uns-und-Presse/Presse/Meldungen/2026/260508-bundesrat-reform-private-altersvorsorge.html (2026)
- Haufe — Altersvorsorgereformgesetz (Altersvorsorgedepot for the self-employed from 2027, Grundzulage up to €540), https://www.haufe.de/steuern/gesetzgebung-politik/altersvorsorgereformgesetz_168_668868.html (2026)
- AssCompact — Altersvorsorgereform: Was aus Wohn-Riester wird (the annual 2% on the Wohnförderkonto ends from 2027), https://www.asscompact.de/nachrichten/altersvorsorgereform-was-aus-wohn-riester-wird (2026)
- Deutsche Rentenversicherung — Frühstart-Rente (13.08.2026; cabinet approval 12.08.2026, first reading in the Bundestag 25.09.2026), https://www.deutsche-rentenversicherung.de/DRV/DE/Ueber-uns-und-Presse/Presse/Meldungen/2026/260813_fruehstartrente (2026)
- Bundesministerium der Finanzen — Statistik zur Riester-Förderung bis 2024 (number of contracts), https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Steuerliche_Themengebiete/Altersvorsorge/2025-11-17-Statistik-Riester-Foerderung-bis-2024.html (2025)
- Einkommensteuergesetz § 95 — Schädliche Verwendung when living outside the EU/EEA in the payout phase; Stundung repaid from 15% of payouts, https://www.gesetze-im-internet.de/estg/__95.html (2026)
- Einkommensteuergesetz § 79 Satz 2, § 86 Abs. 2 — indirect eligibility of a spouse; minimum contribution counting both spouses' subsidies, https://www.gesetze-im-internet.de/estg/__79.html , https://www.gesetze-im-internet.de/estg/__86.html (2026)
- Finanzamt NRW — Schädliche Verwendung und ihre Folgen, https://www.finanzamt.nrw.de/steuerinfos/privatpersonen/riester/schaedliche-verwendung-und-ihre-folgen (2026)
- Deutsche Rentenversicherung — Förderschädliche Verwendung vermeiden, https://riester.deutsche-rentenversicherung.de/DE/Vor-der-Auszahlung/Foerderunschaedliche-Verwendung-vermeiden/foerderunschaedliche-verwendung-vermeiden_node.html (2026)