Riester pension: termination or alternatives?

Riester pension: termination or alternatives?

As a private pension with state support, the Riester pension offers an opportunity to make provisions in addition to the statutory pension. Nevertheless, statistics from the Federal Ministry of Finance show that payments in old age only amount to 132 euros per month on average. The financial and actuary Axel Kleinlein therefore describes the Riester pension as just “measly pocket money”.

Terminating the Riester pension contract by giving notice requires careful consideration. The state allowances and tax advantages must be refunded, which, if terminated early, is considered harmful use and endangers the subsidies. In addition, processing fees apply and the interest on the contributions paid is taxed after payment.

Despite the potential disadvantages of termination, there are several alternatives. For example, the contract can be made free of contributions without the need for further payments. Changing provider can be advantageous in some cases, especially for families or single parents with several children who receive child benefit. The option of withdrawing capital to invest in living space or paying out your pension earlier from a certain age are further alternatives.

In certain special cases, such as a serious illness during the savings phase, termination may make sense. In such situations, the credit could be transferred to a partner living in the same household, or it could be paid out and used for other purposes or inherited. It is advisable to carefully examine an individual situation and the long-term effects of a possible termination of the Riester pension before making a decision.