SteuerGo FAQs

Will I have to pay tax on my Riester pension later?

Yes. Since the Riester pension is built up from untaxed income, later payments are subject to regular income tax. The pensions are therefore not only taxed on the income share (the interest), as is the case with payments from a private pension insurance that is not state-supported. Pensions from a Riester contract must be fully taxed in retirement, although they benefit from the retirement relief amount.

For future pensioners, this means: If they have taken out a private pension insurance that is not subsidised and for which they pay contributions from taxed income, they only have to tax the income share in retirement. However, if the pensioners have chosen an investment form for which they have received state bonuses, they must tax the pension at their personal tax rate. This depends on the total income of the retiree. This applies to all subsidised investments, including insurance as well as fund or bank savings plans.
The good news: No withholding tax, as this is not capital income, but "other income". Although, for example, capital gains from conventional fund savings plans have been subject to withholding tax since 2009, Riester fund savings plans are exempt from withholding tax. This also applies to profits from other Riester investments. However, the pensions must be taxed at the personal tax rate (deferred), which depends on the total income.

Wohn-Riester: Complicated taxation. For Wohn-Riester, deferred taxation is applied. The contributions remain tax-free, only the pension itself must be taxed - at the personal tax rate. And this is where it gets a bit complicated with Wohn-Riester: The contributions and bonuses are recorded on an imaginary "housing subsidy account" with assumed interest of two percent. However, the saver cannot access the account, as the funds recorded there are invested in property funding and no longer exist in principle. At the start of the "payout phase", when other "conventional" Riester savers receive their pension and have to tax this income, the Wohn-Riester saver also receives a notice of their tax debt that has accumulated on the imaginary account over the years. The homeowner pensioner then has a choice: Tax everything at once and receive a 30 percent discount as a reward. Or opt for gradual taxation: Here, they can pay off their tax debt in instalments over a period of up to 23 years, like anyone receiving a regular Riester pension. Again, the tax rate depends on the retiree's total income.