Riester brings allowances, Rürup brings tax deductions, both bring costs and lock-in. Who should still sign in 2026, what the reform of private provision changes and when an ETF portfolio is the better choice.
In short
- Riester: €175 basic allowance plus €300 per child, sensible for families on low incomes; returns often under two percent because of guarantee and costs.
- Rürup: up to €29,344 of contributions 100 percent deductible, for the self-employed and high earners without a company pension.
- Reform 2026: new retirement provision portfolio without contribution guarantee, with ETFs, allowances remain.
- Check old contracts: costs, guarantee, allowances; make them contribution-free rather than cancel.
Riester
The Riester pension subsidises employees, civil servants and their spouses with a basic allowance of €175 and €300 per child born from 2008, provided four percent of the previous year’s gross income, at most €2,100, is paid in. Contributions are additionally deductible as special expenses, which brings high earners more than the allowance. The catch: the contribution guarantee forces providers into safe assets, costs often sit above two percent a year, and the payout is a lifelong annuity taxed in full. For a family with three children and €30,000 of income the subsidy rate exceeds 50 percent, so it pays. For singles on €60,000 the tax deduction pays, but an ETF portfolio usually brings more despite the missing subsidy.
Rürup
The basic pension is meant for the self-employed without a state pension and for high earners who want to save tax. Contributions up to €29,344 (couples €58,688) are 100 percent deductible in 2026; at a 42 percent marginal rate the tax office pays 42 percent of the contribution. The payout is a lifelong annuity taxed at a rising share, 100 percent from 2058. The contract cannot be cancelled, is not inheritable without a rider, cannot be taken as a lump sum. Sensible as an ETF Rürup without guarantee with costs under 0.5 percent if the tax advantage in the saving phase exceeds the tax on the annuity.
The reform of 2026
Since 2026 there is the retirement provision portfolio (Altersvorsorgedepot): a subsidised portfolio without contribution guarantee holding ETFs and funds, with the same allowances as Riester plus a subsidy of 20 cents per euro of own contribution up to a ceiling. Existing Riester contracts can be transferred. Whoever wants allowances without carrying guarantee costs gets, for the first time, a product that can keep up with an ETF savings plan.
Old contracts
Cancelling costs the allowances and tax advantages, which must be repaid. Better: make it contribution-free and transfer to a cheap provider or the retirement provision portfolio. Check the contract for effective costs (in the annual statements), guaranteed rate and allowance level. A contract with costs above 1.5 percent and returns under two percent is a case for transfer.
The decision
Family on a low income with children: Riester or retirement provision portfolio with the full allowance. Self-employed on a high income: ETF Rürup up to the maximum. Employees with a company pension and employer subsidy: exhaust the company pension first. Everyone else: ETF savings plan in a normal portfolio, flexible, cheap, inheritable, with withholding tax instead of the full rate in old age.
Try it yourself
Pension Gap CalculatorAge, net income, expected pension: how big your gap is and which savings rate closes it.Income Tax CalculatorEnter taxable income, read off tax, marginal rate and average rate, with joint assessment.Frequently asked questions
Can I use Riester savings for a property?
Yes, via Wohn-Riester for purchase, construction or repayment. The housing subsidy account is taxed later; sensible if the property is planned anyway.
Is Rürup inheritable?
Only with survivor protection for spouses and children entitled to child benefit. Otherwise the capital falls to the community of insured.
What happens to Riester if I move abroad?
Within the EU the subsidy remains. Outside it must be repaid, deferred until payout.
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