New Pension Plan for Citizens: What You Need to Know
Starting in 2026, German citizens will have access to a new, state-subsidized private pension plan, designed to enhance retirement savings. Announced by Finance Minister Christian Lindner, this plan aims to address the shortcomings of the current Riester-Rente by offering more attractive, flexible, and cost-effective options.
Citizens can invest in certified funds and ETFs, with the exclusion of high-risk products like cryptocurrencies. Two guarantee levels, 80% and 100%, will cater to different risk appetites.
The state will provide a subsidy of up to 600 euros per year, incentivizing higher personal contributions. Additionally, young professionals and low-income savers will receive extra bonuses.
The plan also supports investments in self-used real estate and offers tax benefits during the contribution phase. Existing Riester contracts will retain their benefits, with an option to transfer to the new scheme.
The initiative is expected to cost the state around 380 million euros annually initially, rising to over 500 million euros from 2029. Overall, this reform seeks to make private retirement savings more accessible and beneficial for all.
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