Normally, the Riester pension is a lifelong pension. But there are alternatives. We show what options you have when it comes to paying out.
The most important things at a glance
Anyone who riesters usually wants to ensure that they receive additional payments on top of the statutory pension every month when they retire. However, if you need money earlier, the Riester pension is quite flexible – at least to a certain extent.
We will show you how early you can have your Riester pension paid out, whether larger amounts are possible at once and what that means for your taxes.
When can I have my Riester pension paid out?
As a rule, the payment of the Riester pension coincides with the regular start of the pension. You will then receive money from your private provision in addition to your statutory pension – for the rest of your life, month after month. Payment is made automatically via your provider.
Anyone who does not want to wait until the statutory retirement age can draw the Riester pension earlier – but not before the age of 60. And that too is reserved for those savers who signed their contract before 2012.
If this is not the case for you, the limit for you is 62 years of age. From then on you can have your Riester pension paid out at any time.
Danger: The payments are smaller if you draw the Riester pension before the regular old-age pension begins. After all, you will have deposited less overall and also received fewer bonuses.
Is a payment of the Riester pension possible in the event of termination?
In principle yes. However, whether you get any money back at all depends on how much and how long you have already deposited.
Because if you cancel, you not only have to repay the state allowances and tax benefits, but also tax interest income, possibly pay a processing fee and possibly settle outstanding closing costs.
Is a one-off payment possible?
Yes, in principle this is possible. However, a one-time payment of the entire saved Riester assets is considered to be detrimental to funding. This means that you must pay back all government allowances and tax benefits.
This is because the Riester pension is designed as a lifelong pension. If you instead have everything paid out in one go, this does not correspond to the original purpose – the state demands its money back.
This variant can still be useful if you urgently need money. However, your tax rate increases in the year of payment because your annual income can rise sharply in one fell swoop.
Exception small amount pension
An exception applies to the so-called small-amount pension (“severance payment”). This is the case when your saved Riester capital is so low that a monthly lifetime payment is not worthwhile.
In this case, you can have the entire Riester pension paid out at once without having to repay allowances or tax benefits. You must pay tax on this severance payment in the year of payment, but at a reduced tax rate. Because the so-called fifth rule applies to the Riester small-amount pension. You can apply for this in your tax return.
The severance payment is divided by 5. The result is added to your annual income. The tax burden is calculated from this sum and the result is multiplied by 5.
Who can settle?
Whether you can make use of this exception rule depends on the so-called reference value west according to Section 18 of the Social Security Code IV. In the case of a small-amount pension, the monthly pension may not be greater than 1 percent of this reference figure.
Since 2021 it has been 3,290 euros. Your theoretically possible monthly Riester pension must not be greater than 32.90 euros if you want the capital you have built up to be paid out in one fell swoop.
What applies in the event of death? If you die before the start of your pension, the credit from a classic Riester pension insurance can only be transferred to a Riester contract of your spouse or a child entitled to child benefit. Otherwise, the allowances and tax benefits are deducted and only the deposits are inherited. If you die after the start of your pension, your relatives may be entitled to your Riester pension. However, you must have specified a guarantee period in the contract for this.
Is a partial payment possible?
Yes. However, this goes up to a maximum of 30 percent of the total capital. A limit of 20 percent applies to contracts concluded before 2005. You do not have to pay back the allowances and tax benefits with this model.
You will then receive the remaining capital in the regular form of a lifelong monthly pension. These regular payments are correspondingly lower.
