Riester pension: Disappointing payout conditions – expert gives tips for optimal use

Riester pension: Disappointing payout conditions – expert gives tips for optimal use

Since the introduction of the Riester subsidy in 2002, many consumers nationwide have taken out Riester contracts. Currently, more and more of these contracts are entering the payout phase, and many consumers are realizing that the payout conditions do not meet their expectations. The Brandenburg Consumer Center gives tips on how to get the most out of your own Riester contract. Many consumers turn to the consumer advice center when they receive payment information from their Riester provider shortly before retirement. Most people would like to receive a lump sum payment, but are disappointed with the payment of a small monthly pension. In addition, consumers who have opted for a bank or fund savings plan are confronted with unnecessarily high closing and distribution costs. There are various options for paying out Riester contracts. In principle, the providers pay out a monthly lifelong pension, but a partial lump sum payment is also possible. Consumers receive up to 30 percent of their saved capital as a one-off payment and a monthly pension from the remaining capital. There is usually no provision for a one-off payment of the entire capital, unless the contract is terminated and the Riester subsidies already received are repaid. However, there are exceptions for small-value pensions. Consumers with long-term Riester contracts should take another look at their contracts before retirement and check whether there are flexible expiration options and whether they want to annuitize the capital. If the conditions do not meet your personal expectations, the contract can at least be made free of contributions. Termination is usually accompanied by financial disadvantages. The Brandenburg Consumer Center offers support in checking the contract conditions and assessing the options for action. Consumers can use the advice from the consumer advice center to clarify questions about their Riester contract. The increasing payouts of Riester contracts may have an impact on the market. Since many consumers are dissatisfied with the payout conditions, this could lead to a decline in new Riester contracts. The image of Riester funding as a whole could also be damaged if many consumers are disappointed and have negative experiences. There is a possibility that consumers will increasingly consider alternative retirement planning products to ensure their financial security in retirement. However, it is also possible that Riester contract providers will adapt and offer more flexible payment options to meet the needs of consumers. Overall, the increased advisory activity of consumer advice centers and the publication of information on the payment conditions of Riester contracts could help consumers to be better informed and to be able to adapt their contracts accordingly. This way, negative surprises when paying out can be avoided. According to a report by www.l-iz.de.