Riester pension from age 50: State subsidies make late entry attractive

The Riester pension remains an option for late entrants, although the deadline for entry expires in 2027. The Handelsblatt explains that state subsidies increase attractiveness for some savers – particularly for employees who have not yet contributed to private retirement provision.

The basic subsidy of 175 euros per year and child allowances of up to 300 euros per child make entry mathematically interesting if you take full advantage of the support. The Saarbrücker Zeitung reports that low earners and families in particular can benefit from these subsidies, as the support flows regardless of the profitability of the savings plan.

However, the Aachener Zeitung warns of a central problem: administrative costs for Riester contracts are often substantial and can significantly reduce returns. Commissions for intermediaries, account management fees and insurance costs consume a large portion of the subsidies – especially over short savings periods.

Costs reduce returns

Those who start at age 50 have only about 17 years until retirement at age 67 to build capital. During this period, the subsidies must first cover costs before any real returns are generated. OP Online clarifies that entry is worthwhile above all if you use maximum support and choose a low-cost provider.

Experts recommend late entrants to compare cost structures carefully. Particularly with low-fee Riester savings plans, the combination of personal contributions and state subsidies can still be profitable. However, those who can only pay in small amounts or have an expensive contract should consider alternative retirement provision options.