![]() In comparison to other savings options, such as life insurance, Riester savings cannot be pledged and do not have to be used up before their owners can qualify for long-term unemployment benefits or social assistance. Or, much more efficiently, he or she should seek professional advice by an independent financial advisor (e.g. E ach Riester client still needs to compare different types of Riester pension plans and consider other forms of investment and saving (that may not receive beneficial tax treatment) to fit his or her individual needs and ability to make contributions. ![]() Comparison with other forms of savingsĪlthough the Riester pension plans guarantee that pensions are received. This range of products has developed over a time span of 10 years and the variety it represents can be viewed as an additional set of incentives. According to the Riester regulations, bank savings plans, classical private pension insurance, unit-linked pension insurance, fund savings plans, pension funds or even direct insurance can be included in the range of Riester products if they fulfil the certification criteria. One prerequisite for receiving these government pension payments is to invest in a certified Riester product. If Riester savers are not paying 4%, the government pay-out will be reduced to the percentage that is paid into the account. But usually due to a lower income and lower tax rates at that time, tax benefits over the entire period are substantial. Upon retirement, the monthly Riester pension payments are fully taxable. Alternatively, all Riester savings up to 2,100 € (including subsidies) can be claimed as a special expense deduction in the worker’s annual income tax return if that is more profitable for the Riester saver than receiving the subsidies. If he or she has children, an additional 185 € or 300 € (for children born after January 1 st 2008) can be received. In order to receive government subsidies of 175 € per annum (350 € for married couples), a Riester saver has to contribute 4% of his/her annual income before taxes (but only to a maximum of 2,100 € minus subsidies) into his/her Riester account. People who provide for their retirement with Riester have to invest at least 60 € per annum as a basic contribution. Although self-employed persons can use the Riester system if their spouses are members of the income groups cited above (“indirect beneficiaries“). Riester pensions are not available to the self-employed and employees who are not compulsorily insured. Households with a high income / high tax rate, obtaining considerable tax advantages in excess of the subsidiy amount Households with relatively low incomes, obtaining full subsidies for a very moderate contribution It also includes soldiers, people who receive un-employment or reduced earning capacity benefits and those who care for others at home. Compulsorily insured employees, agricultural workers and civil servants. The target group of the Riester pension includes those who will be affected most by decreasing public pensions. Jetzt kostenlosen Online-Beratungstermin buchen Target Group Machen Sie sich den Weg zur Lösung Ihres Anliegens nicht unnötig schwer. Unsere Kunden empfehlen unsere Beratung in über 3.100 Bewertungen. A simple but efficient certification system ensures the quality of the investment products. The basic idea is to use government subsidies as an incentive for people to secure their old age income with additional private old age provision. Riester pension was supposed to compensate for a parallel reduction in the German Statutory Retirement Insurance System (“ Gesetzliche Rente”). It is named after the former Minster of Labour and Social Affairs, Walter Riester. The so called “ Riester Rente” (Riester pension) was introduced in 2002. The Idea of the “Riester Rente” (Riester Pension) In light of the complexity of the subject, clients should seek professional advice by an independent financial advisor (e.g. Beneficiaries with an international background need to take into account that spending their retirement outside of the EU/EEA reduces the benefit gained out of Riester. Riester is strictly regulated by the government, making the investment very secure but also less flexible. For those who qualify, in particular employees, investment in a state-subsidised Riester pension scheme can be a very profitable option to increase their pension payments.
0 Comments
Leave a Reply. |