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Riester pension ETF

With an ETF Riester pension you manage to combine several advantages of different financial products in one product. However, ETF Riester Rente is not the same as ETF Riester Rente and in most cases the really important criteria are not known and the wrong provider is selected for the Riester Rente on an ETF basis. In this article you will find out which point is really important and what you should pay attention to when choosing your ETF Riester.


What is an ETF-based Riester pension?

An ETF Riester pension is a unit-linked Riester pension insurance with a premium guarantee and the possibility to invest in ETFs at low cost. A Riester pension based on ETF is just as certified as any other Riester pension.

Tax refunds and allowances

A maximum of € 2,100 (single) contributions per year can be claimed as special expenses. In addition, there are allowances that you receive from the state (€ 175 personal allowance and € 300 per child, or € 185 per child if the child was born before 2008). The so-called cheaper check is used to determine whether the allowances or the special expenses deduction are cheaper for you. This is calculated automatically by the responsible tax office.

4% of the previous year’s gross for maximum funding

In order to get the highest possible funding, you have to pay 4% of your gross income from the previous year into the contract (minus the allowances).

30% one-time payment possible

When you retire, you can have 30% of the capital paid out at once. The rest is then paid out as a lifelong annuity. Of course, you can also have 100% paid out to you as a lifelong pension.

Advantages of an ETF-based contract

First of all, let’s take a look at the advantages of a Riester pension based on ETFs.

  • low effective costs through passive investment form (ETFs)
  • Broadly diversified portfolio with good potential for returns (e.g. investment in the MSCI World ETF)
  • higher return opportunities through lower actual costs
  • “Double” the return through annual bonuses (if the contribution was chosen to be optimized)
  • Deduction of contributions to the Riester pension from tax

These would be the basic advantages of an ETF Riester.

However, it would be too easy if you could stop at this point and simply select the next best Riester provider and conclude your contract there.


Important criteria for your Riester pension with ETF

As mentioned at the beginning, there are a few more criteria that you should definitely consider before taking out an ETF Riester. I would even go so far that these criteria are even more important than the advantages mentioned above. Because the advantages are immediately nullified by choosing the wrong Riester provider.

The choice of provider is crucial

Expressed differently: The following criteria are the basis that the above advantages can have a positive effect on you. For example, many customers have opted for fairr Riester in the past. We warned against this at the end of 2016. At the beginning of 2020, the fairr Riester construct hit the wall fully. This makes it clear that the right choice of provider is the alpha and omega of your Riester pension with ETF.

The pension factor

It is mentioned far too seldom and attention is paid to it even less often. The pension factor in your Riester pension is almost THE decisive factor that determines how high your monthly pension will be later.

And that’s exactly why your pension factor must meet the following points:

  • He has to first be present (With Riester fund savings plans such as Union Invest, DWS and Co.) there is no pension factor at all. This will only be determined later together with an insurer at the start of retirement. And until then, that is nothing more than a 100% incalculable pension for you
  • Of the Pension factor must be 100% guaranteed be. This means that the pension factor is already firmly promised to you today and not, for example, “will be recalculated with the calculation bases then valid at retirement”. I think it’s clear that this will backfire for you as a customer.
  • No trustee clause . The insurer should also refrain from consulting a trustee. Because through this process, even a guaranteed pension factor can be undermined

In the following also as a video ( largest German insurance knowledge channel ):

Honestly: how many of the points just mentioned have you heard before? Fortunately, you are now smarter and can pay attention to these very important points ;-).

The fund quota

Your Riester provider must also be able to ensure that as much of your contribution as possible actually flows into the ETFs. Unfortunately, the reality is different here. In many cases, the fund or shares / ETF ratio is less than 10%. I think it is understandable that no return can be generated for you here. So you need an insurer who can really represent a high fund quota. Because just because it says “fund-linked” does not mean that there is really a lot “fund-linked” ;-).

The financial strength of the insurer

And last but not least, of course, you also have to make sure that you do your ETF Riester with an insurer that has solid financial strength, is not too small and the insurer has not been around since yesterday. In other words, with a “start-up” you should not necessarily conclude a product that is expected to run for around 25-40 years in the savings phase and then another 30 years or more in the payout phase.

Fortunately, there are very large insurers who also meet all of the above criteria and also offer a large selection of ETFs and have low actual costs.

How do you find and apply for the right ETF Riester contract?

As you may have noticed while reading the article, the subject is not necessarily super easy. There are many points to consider and if you are not a Riester professional, you can easily make mistakes here.

That’s why we want you – like many others before (here is our Google reviews ) – offer you the opportunity to apply for your ETF-Riester pension together with us and not make any mistakes here. This is where our advice is completely free to you.

You can send us an appointment request directly using the form below (unfortunately there is currently no direct Online appointment booking possible, since these dates are always booked out very quickly) and we will get back to you as soon as possible.