Use Riester pension for financing?

Just search the internet. There are plenty of reputable calculations on this. In most cases, you have to be around 100 years old for it to bring a usable return. But you can also continue to tell yourself nice lies about the Riester pension and claim that there are fantastic returns not achievable on the capital market.

The capital guarantee is worth nothing with an appropriate investment duration. Yes, Riester is unprofitable in almost every scenario. Despite being tied to funds, my Riester contract only yielded about 4% in 2017. The MSCI World returned around 20% in 2017. The rest are costs and reallocations. And that is one of the best Riester products on the market.

Your argument that annuitization is very bad everywhere doesn't help us either. Fortunately, you don't have to annuitize your private portfolio.

Just search the internet. There are tons of serious calculations on this. In most cases, you have to live to around 100 years old for it to bring a decent return. But you can also continue to happily lie to yourself about the Riester pension and claim there are fantastic returns that cannot be achieved on the capital market.

The capital guarantee is worth nothing with a corresponding investment period. Yes, Riester is unprofitable in almost every constellation. Despite the fund allocation, my Riester contract only yielded a good 4% in 2017. The MSCI World returned around 20% in 2017. The rest are costs and reallocations. And that’s one of the best Riester products on the market.

Well, it’s also because the folks are only allowed to invest a certain portion in the capital market. The rest is "safely" bunkered in bond securities to provide the guaranteed interest. With falling returns, the guaranteed interest also fell.

Where is it currently? I think somewhere around 1%.

and what costs do you have on your notice?

by the way, I also found it outrageous that from a child allowance (I think it’s 300 per kid) the broker also gets a proportional closing commission. and that year after year

sure, the Riester contract is "higher" because of this allowance. But what does the insurance guy have to do with my children? was he there at their conception?

I would get upset about that too. However, you probably took out the wrong product and with the wrong broker.

I have fully optimized it. One of the best products on the market and through the corresponding broker without initial charges, commissions, etc., and still Riester is not worthwhile.

Reasons:
- The active fund is a moderate underperformer (high TER)
- I pay an additional annual fee
- It regularly shuffles between stocks and bonds, which has so far had a very negative effect on performance (sure, that also stabilizes somewhat in worse phases, which is the idea behind it)

well, that’s also because the fuzzies are only allowed to invest a certain part in the capital market. The rest is "safely" bunkered in bonds to provide the guaranteed interest. With declining yields, the guaranteed interest also fell.

where is it currently? I think somewhere around 1 %

There is no guaranteed interest there. You only get your paid contributions plus allowances guaranteed. And yes, that’s true, this guarantee is a terrible return killer.

What am I supposed to do with an internet calculator, I just showed real numbers. And especially for you, I looked up the development from 2017 again: +8.11% fund performance, minus 1.4% management fee

There are no intermediary/closing fees with me. Also, no fund surcharges.

That makes "one of the best Riester products" quite relative.

Although 2017 is not really representative for a Riester evaluation. The strong rise in the stock market cannot be tracked by Riester products. But that also applies in the opposite direction :)

Let's assume you actually achieved about 6.7% return with your product. If you had invested the money in an MSCI World ETF, it would have been 20%. But as already mentioned, the moderate performance during the term is not the main problem, but the lousy annuitization. And that is exactly what you could avoid by using real estate financing – preferably shortly before retirement.

By the way, I have DWS Riester Top Dynamik. It performed best in various tests. I also think it's pretty good for a Riester product. But compared to direct investing, it's unfortunately lousy, and neither the subsidy nor the taxation offsets that.

By the way, I'm surprised that despite my rational aversion to Riester, no one has asked me why I still pay 2100 euros per year minus subsidies into this product.

I would be upset about that too. However, you probably signed up for the wrong product and through the wrong intermediary.

I have fully optimized it. One of the best products on the market and through the right intermediary without issue surcharges, commissions, etc., and still Riester is not worthwhile.

Reasons:
- The active fund is a moderate underperformer (high TER)
- I pay an additional annual fee
- There is regular shuffling between stocks and bonds, which has so far had a very negative impact on performance (of course, that also stabilizes somewhat in worse phases, that is the idea behind it)



There is no guaranteed interest rate. You only get your paid contributions plus allowances guaranteed. And yes, that’s true, this guarantee is a nasty return killer.

It's great that you spoke up about it...

I have to say, despite being a numbers person, I signed up for it when Riester was fresh on the market, I think around 25 years ago or so. Over the years I then sunk about €2,500 because I dumped the Riester last year.

Let's be honest, who among the 8 million Riester savers really gets the product? Who only signs it with friends and acquaintances (like I did) because it’s good for retirement?

Very few actually look at how, where, what the product is built of.