In 2002, the state-funded “additional pension”, also known as the Riester pension, was introduced. But the result is sobering: According to the newspaper “Bild”, the first Riester payment statistics from the Federal Ministry of Finance only show an average of only 132 euros per month for the insured in old age.
At the end of 2022, more than one million people were receiving Riester pension benefits, including around 50,000 with multiple contracts. Women receive an average of about 1,500 euros per year and men 1,670 euros. As the newspaper “Bild” reports, the Ministry of Finance justifies this with the short-term savings phase and assumes that the payment amounts will increase in the future.
This development is not new. It has long been debated that suppliers are the ones who especially benefit. Here, for example: The Riester trap occurs at the beginning of retirement: what you can do now
So cancel the contract? You should think about this carefully. Because then government allocations and tax benefits will have to be returned. Additionally, you will not receive any refunds (e.g. processing fees). Termination can therefore be costly.
Termination should be the last option.
The disadvantages almost always outweigh the disadvantages, except in one special case: if you are seriously ill but the Riester contract is still in the savings phase, it may make sense to cancel it. You can use money to fulfill a wish or pass it on. You can cancel using the sample letter from the Finanztip money guide.
In all other cases, you are left with three better options:
Option 1: stop depositing
If you are not satisfied with the return, you can cancel the contract without paying any contribution. Then you will no longer pay money and you will be able to make other provisions for your old age. The best thing is an ETF savings plan. You suffer no loss. Because when you retire, all your contributions plus state allocations will be available for the payment of your pension, that is guaranteed.
Option 2: Change provider
You can also change to another provider. However, this is usually only worth it if you especially benefit from government subsidies. This applies to families or single parents with at least two children who receive child benefit.
Does that apply to you? Then it may be worth switching to a contract where you can get more bonuses or reduce costs. Important: Your balance must be above the contribution guarantee so that you do not suffer losses.
Option 3: withdraw money earlier
Will you be retiring soon? You can then proceed early to the payment phase of your Riester contract. This is possible from age 60 (if you hired before 2012) or from age 62 (contracts hired after 2012).
Why you should definitely wait?
Do you want to change or terminate the contract? There will probably be a Riester reform this year. It's better to wait and see what changes as a result and keep the contract free of contributions until then. You can find out how to do this in the “Cancel Riester” financial advice guide.