Rürup vs. Riester

The two state-subsidised pension models in Germany compared directly.

Riester pension:

• For whom: people compulsorily insured in the statutory pension insurance
• Subsidy: allowances (€175/year basic allowance, €185–300/child) OR deduction as special expenses (max. €2,100)
• Own contribution: 4% of the previous year's gross income minus allowances
• Contribution guarantee: yes (100% of payments guaranteed) – and THAT is exactly the problem
• Taxation: the pension is fully taxed (deferred taxation)
• Future: will be replaced in 2027 by the retirement savings depot (Altersvorsorgedepot)

Rürup pension (basic pension):

• For whom: self-employed people, freelancers, high earners
• Subsidy: tax deduction as special expenses of up to €27,566/year (2025, singles)
• Tax effect: at a 42% marginal tax rate: up to €11,577 tax savings per year
• No allowances, no mandatory contribution guarantee
• Taxation: the pension is fully taxed
• CANNOT be cancelled! No lump-sum option (monthly pension only)

Who benefits from what?

• Riester was worthwhile for: families with children (child allowances €300/child/year), low earners
• Rürup is worthwhile for: the self-employed (no access to Riester), high earners on the top tax rate
• Neither: for most people an ETF savings plan + possibly the retirement savings depot (from 2027) is the better choice

Criticism of both:

• Riester: costs too high, returns too low (contribution guarantee = no shares), being replaced
• Rürup: cannot be cancelled, not inheritable (only to spouses), only as a pension (no lump sum)