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Residential Riester: 4 reasons why it pays off
Residential Riester: 4 reasons why it pays off
Video: Residential Riester: 4 reasons why it pays off
Video: Pension System in Germany | Public Pension, Rürup, Riester, Company Pension, Private Pension, etc 2023, February
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In 2008 the new home allowance was introduced. Today, almost two million people benefit from allowances and tax benefits for residential Riester building society contracts.

Table of contents Table of contents Wohn-Riester: 4 reasons why it pays off

  • 1st advantage is up to 50, 000 euros
  • 2. Low tax burden in old age
  • 3. Manageable savings
  • 4. Sensible especially in the interest rate low

Table of contents Table of contents Wohn-Riester: 4 reasons why it pays off

  • 1st advantage is up to 50, 000 euros
  • 2. Low tax burden in old age
  • 3. Manageable savings
  • 4. Sensible especially in the interest rate low

Residential Riester building society savings bring people into their own four walls faster. If you live in your own property, you save an average of EUR 600 per month in rent payments. Therefore, there is hardly a better supplementary pension than living rent-free. Your own property is even an old-age provision from which you can immediately benefit - because the Riester building society savers benefit from their support when they move into the residential property and because of the financing advantage well before the actual retirement age.

1st advantage is up to 50, 000 euros

For a family of four, the financing advantage of building or buying a Riester-funded property can amount to up to EUR 50, 000 according to LBS calculations. Families with children mostly benefit primarily from the Riester allowances. Many single and childless couples can enjoy significant tax benefits through the Riester special expenses deduction: tax benefits and allowances of up to 882 euros in total are possible per year.

2. Low tax burden in old age

The funded capital and the redemption payments including the allowances must be taxed for all Riester contracts from the start of the payment phase. However, the tax rate in retirement is usually far below that of work. The decisive advantage: the taxes are typically only a fraction of what would be spent on rent payments.

There is hardly a better pension than living free of rent. With your own property, you save an average of 600 euros in rent per month. Jörg Münning, chairman of LBS West

3. Manageable savings

People who earn little can skim off all allowances with a small saving. The full subsidy for residential Riester flows when four percent of the pensionable income from the previous year is paid. The allowances can be deducted from this.

It pays off like this: Whoever earns 25, 000 euros a year should save 1, 000 euros - that makes 825 euros out of his own pocket and 175 euros for a basic allowance. If the allowances are added by two small children (600 euros), only 225 euros per year have to be paid. A spouse who is not working can secure his full basic allowance with just 60 euros a year. And even for higher earners, the necessary savings for full funding are manageable: Including allowances, there is a maximum of 2, 100 euros per saver or a maximum of 175 euros per month.

4. Sensible especially in the interest rate low

Anyone who wants to buy or build soon or in a few years should consider: The low interest rates will not last forever. Wohn-Riester is a government-sponsored interest rate hedge, an insurance against rising financing costs. With a combination of a loan and a residential Riester building society savings contract, property buyers are holding historically low interest rates - right down to their last installment.

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