Residential Riester / Building-savings Residential Riester / Residential Riester Loan

Hello everyone, here are the key data. I am 25 years old (about 50,000 gross), employed in a permanent position at a medium-sized insurance company and do not think that I will change my job or location in the medium term. I (we, my girlfriend and I) plan in the medium term (in the next 5-10 years) to buy a property. We all know that our retirement provision will not be the best. I already have an ongoing building savings contract (calculated for 30,000) with LBS West. I had my obligatory annual information appointment for this. At this appointment, they recommended Wohnriester to me. I asked for time to consider and have now gone through many posts, opinions, and articles. Therefore, I am quite aware of the advantages as well as the disadvantages. It became clear that Wohnriester is especially suitable for families. However, we do not plan to have children. What is your opinion on Wohnriester? Is it worthwhile despite subsequent taxation and inflexibility also for younger childless couples? Thanks for your help!

You are sitting right at the source. Talk to a trusted field sales representative who can tell you what makes sense or nonsense without immediately seeing the commission dollars in their eyes.

Riester is especially worthwhile for families with children because the subsidies increase as the personal contribution decreases.

Wohnriester only makes sense if building a house is 100% planned, otherwise it is also useless.

We are also childless and will remain so, and Wohnriester (loan! not Bauspar-Wohnriester!) is definitely worthwhile. It’s not just about the rather meager allowances of just under 300 euros annually for a couple, but above all about the tax-free repayment contributions.
If you repay, for example, 4200 euros annually with the normal loan installments for the house, and I think you can definitely manage that (that would be less than 400 euros per month repayment portion), then these 4200 euros are tax-free. At a 20% tax rate, that’s almost 800 euros that you have in addition. Plus the allowances, so that’s 1100 euros more in your pocket annually compared to a non-Wohnriester loan.
Of course, at some point you have to pay back taxes on these amounts. However, later in retirement, when this repayment taxation occurs, we will hardly exceed the tax-free allowance threshold under which you even have to pay taxes. Usually, you have significantly less income in retirement than in working life. So for us, the repayment taxation will probably not apply at all. But even if it doesn’t go away, it hardly matters; you can also have this calculated (there are plenty of examples on the internet).
The Wohnriester loan also does not have to be more expensive than the normal building loan; after the first fixed interest rate period expires, we will definitely switch to Wohnriester, which will be in 2.5 years (fixed interest rate 5 years). Until then, unfortunately, the allowances and the tax freedom initially expire, but it simply isn’t worth taking out another Riester contract for 2-3 years now, and besides, it’s impossible for us to save 4200 euros annually alongside the house financing. With Wohnriester, this would be eliminated because the repayment automatically counts as a savings contribution.
However, we already have a house; if a house purchase/construction is not planned, Wohnriester, in my opinion, does not make sense, because I would never sign up for a Bauspar contract again (currently we still take the housing construction premium, but apart from that a Bausparer really only has disadvantages: hardly any interest, closing fees every few years, inflexible).

Unfortunately, we only offer the classic Riester pension ... However, this does differ somewhat from the [Wohnriester] ...

Thank you for your very detailed answer

Where exactly is the difference between Wohnriester loan and bausparwohnriester?

The Wohnriesterdarlehen is a normal loan, the Bauspar-Wohnriester a building savings contract ... .

... then these 4200 euros are tax-free.

They may possibly be deducted as special expenses, but they are not tax-free.

Plus the allowances again, ...

No, either allowance or tax reduction if this is higher than the allowance.