How to use Wohnriester

Surely there is compound interest?

Does it now mean that with 4000€ I have to pay 2% tax, so 80€, then the matter is settled, right?

So do I always have to pay 2% tax on the amount paid out?

Can these taxes also be paid before reaching retirement?

No. You have to "interest" the 4000€ on the home ownership savings account at 2%. After, for example, 30 years, the home ownership savings account balance will then be 7,245.45 €. These are then added to your income and taxed at your personal tax rate. Since you are probably under 2800€ in retirement age, the one-time taxation is not worthwhile. Therefore, the amount is spread over 20 years; meaning each year 370€ are added to your income.

My crystal ball tells me that is 70€ annually over 20 years.

And there you see the advantage of Riester. Today with little contribution 4000€ and only pay 1480€ tax at retirement age (and the contributor paid in 60€ annually for a few years; say 10; that's 600€. On average a good deal... (after all, you also don't have to pay interest on the 4000€); that could also be included in the cost-benefit calculation.

Paying the tax now only works if you repay the subsidy.

You don't get anything for free. The tax gift (or allowance) this year will be skimmed off in old age.... I have exhausted my Riester.

That really doesn’t sound good.

So that means I pay €70 annually for 20 years.

Now 2 more children are planned, then the amount will be higher.

If I leave it as it is and later have it paid out as a pension, it’s better, right? Then I get the pension and the corresponding part is directly deducted?

The €4000 are in my wife’s [Riester], in my [Riester] there are just about €700, I used to pay €20 monthly for a while.

If I want to terminate the [Riester], do I only get my money back, the €60 annually? Plus then the contract fee?

That really doesn't sound good.

So I pay 70€ annually for 20 years.

Now two more children are planned, so the amount will be higher.

If I leave it as it is and later take it out as a pension, isn't that better, since I receive the pension and the corresponding amount is directly deducted?

The 4000 are on my wife's Riester, on my Riester there are barely 700€, I had been paying 20€ monthly for a while.

If I want to terminate the Riester, will I only get my money back plus the 60€ annually? Plus the contract fee?

Either way, you have to pay tax on your Riester in old age at your personal tax rate.

One way or another, you have to pay taxes on your Riester in retirement at your personal tax rate

But at least he gets money then...

The tax gift (or allowance) this year will be taken away in retirement....

Even in his case, there is actually a plus in the end. And if you properly declare Riester in the tax return today, it will be even more.