Transcription
540 € from the start for ETFs. The new retirement savings depot explained simply. What was hardly imaginable for years in retirement savings is now actually coming. And precisely because of this, this topic is so explosive, because many rightly ask themselves why in Germany the old Riester system was promoted for so long, with complicated rules, mandatory guarantees in contracts, high costs, and often rather manageable returns, while simple ETF saving practically got nothing from the start. All of that is changing, and in this video, I will show you briefly and compactly everything important that you need to know about it. A warm welcome to our channel. My name is Simon. I am the finance nerd, and if you want to have topics like money, taxes, and investing explained understandably in the future, then subscribe to our channel right away. It will be worth it for you. Let's now look directly at what this new model is supposed to be at all. At its core, it's about a retirement savings depot, meaning a new state-subsidized framework for your private retirement savings, which relies much more heavily on securities like ETFs, for example. The goal is clear: Private retirement savings should become simpler, more return-oriented, more flexible, and more understandable. And that is precisely the big difference from the old Riester logic. There, products were often characterized by guarantees. While that sounded secure on the one hand, it often created exactly the problem in practice that frustrates many to this day: high costs, little transparency, and often too little return in the end. The new retirement savings depot is intended to be much more aligned with what many are already doing anyway, namely investing regularly in securities. And now comes the point that is, of course, the most exciting for most people. How much subsidy is there at all, and what improvements have now been agreed upon very recently? According to the current status, the basic subsidy is supposed to work as follows. For the first 360 € paid in per year, there is a 50% subsidy. That would be up to 180 €. For the portion from 360 € and 1 cent up to 1800 €, there is then a 25% subsidy. This brings another up to 360 € for this second segment. In total, this results in a maximum basic subsidy of 540 € per year. If we compare that to before, it was 185 €. This also means that anyone who organizes their ETF in this new framework in the future and fully utilizes the eligible deposit can secure up to 540 € per year directly from the start. This is precisely what makes this model so much more exciting for ETF savers, because until now, subsidies were often tied to products that had very little to do with classic securities saving. Now, for the first time, there could be real subsidies for a much more modern savings framework. In addition, there is also the child subsidy. One knows this a bit from Riester. But here it is different, because here it has also been refined. According to the current status, the child subsidy is supposed to be 100% up to a personal contribution of 300 € per year, meaning also 300 € in subsidy. This is a quite relevant point, especially for families with small or medium savings rates. Additionally, a newcomer bonus of 200 € is still planned for young people under 25, and the minimum contribution remains low at 120 € per year, or 10 € per month. This is important because it consciously keeps the entry barrier low, and not only people with ample income should benefit, but actually almost everyone. The great incentive of this new retirement savings depot essentially lies in three advantages at once. The first advantage, we know it, is the direct subsidy from the state on the deposit, as just mentioned. You pay in your own money, and the state adds something on top of the contract. Exactly. That's why this model is more than a normal ETF depot, where you otherwise finance everything entirely out of your own pocket. The second advantage, on the other hand, is tax-related. Your deposit should also continue to be deductible in your tax return, as was the case with Riester before, and this through the so-called special expenses deduction. The tax office then checks in the context of the most favorable assessment during the tax return whether you are entitled to further tax benefits in addition to the subsidy. In the best case, you not only receive the direct subsidy from the state but, depending on your income, also an additional tax benefit through the tax return. And the third advantage is the one that many don't really consider at first. The money can grow tax-wise much more calmly during the savings phase than in a normal ETF depot. Precisely here lies the real charm of this state-subsidized savings framework. The capital works long-term within the depot without the same tax effects as in a normal depot constantly interfering and potentially requiring you to pay taxes repeatedly. Taxation then only occurs at the end, in the payout phase, meaning deferred, as it's called. And over many years or decades, this can of course make a real difference in the compound interest effect because more money remains in the system, i.e., in your depot, and continues to work for you. Precisely because of this, the compound interest effect can also have a stronger impact. How much can you deposit at all? According to the current status, up to 1800 € per year remains eligible for subsidies regarding the subsidy itself. At the same time, and this is where it gets exciting, you should be allowed to deposit significantly more into the depot overall, namely up to 6840 € annually. This means you could save a portion of your retirement with a direct subsidy and additionally put further money into the same tax framework and deduct it. For this additional portion, there will be no subsidy, but there will be the tax framework, as just mentioned, and that is, of course, interesting. Especially for people who want to save more for retirement anyway, this can be a quite exciting point. What is also exciting is who is allowed to use this model at all. And here too, there has been an important change. Very short-term. According to the current status, self-employed individuals should also be eligible for subsidies in the future. This was actually not possible with Riester at all. Additionally, certain mandatory members of professional pension institutions are to be included in the circle of eligible individuals. This is a big step, because self-employed individuals in particular have so far been left out of many state-subsidized retirement savings solutions or could only benefit in a limited way. There was usually only the so-called Riester pension. This makes the new retirement savings depot significantly broader and more relevant for millions of people in Germany, or almost for almost everyone. And now to the question of what is allowed into this depot at all. A return-oriented savings framework is planned, but not completely without limits. At the same time, products on the market with 80% or 100% capital guarantee should still be possible, but with the corresponding disadvantages that less money flows into free assets. This means there will likely be a range from more security-oriented solutions to opportunity-oriented fund and ETF variants. And that is precisely the actual change in direction. Riester was strongly characterized by guarantees, as mentioned. The new model, however, opens up much more towards pure investment in the capital market. Exactly. Therefore, one can certainly speak of a new generation of state-subsidized retirement savings here. Now we come to a point that was particularly politically contentious: the costs. In the original concept, a cost cap of 1.5% effective costs was planned for the so-called standard product. Precisely this was heavily criticized by many. According to the current status, it has now been agreed to lower this cap to 1% for the standard depot. This is clearly better. At the same time, one must honestly say that this cap, according to the current status, only applies to the so-called standard product, i.e., the entry-level variant. For other subsidized products, higher costs may still be incurred in practice, for example, by private providers. Exactly. Therefore, it will be decisive later which providers will create really good and inexpensive ETF products from this new framework. As customers, we should not be blinded by this, and which products might just be a new label but then an expensive product like before. And here comes another remarkable innovation. In addition to private providers, a public entity should also be able to offer a standard depot. So, there will not only be solutions from banks, insurers, or other market providers, which can often be very profit-oriented, but also the possibility of a publicly organized standard product. This is politically relevant because, for the first time, not only the subsidy is set by the state, but possibly also a state-influenced standard solution in the market. Previously, one always had to go to an insurer, bank, or similar. Whether this will ultimately be particularly inexpensive or particularly attractive remains to be seen, of course. But the mere possibility shows how far-reaching this restructuring, I would almost call it a pension revolution, has been thought out and will come. More flexibility is also planned for changing providers. In the first 5 years, a change of depot can be arranged for up to 150 € in costs, according to the current status. After that, it should be free of charge. This sounds fair, of course. However, what will be decisive here in the end is how transparent these costs are displayed and how easy or difficult changes are in practice, with potential depot transfers. Because if this new system is to be truly modern, it must not lock people into sluggish or expensive structures unnecessarily again. Of course, the whole thing remains real retirement savings. This means that anyone who wants their money early from this retirement savings depot is using it in a way that harms the subsidy. It was like that with Riester before. Then subsidies and any tax benefits would generally have to be repaid. At the same time, the payout phase should be somewhat more flexible than before. This was often difficult with older Riester models. According to the current status, a lifelong annuity or a fixed-term payout plan at least until the age of 85 is foreseen. Any assets not yet paid out will generally remain inheritable, i.e., they will not be lost. This also makes the model significantly more attractive for many than other Riester solutions before. And a very important note applies here to everyone who already has a Riester contract. Premature termination can now be very expensive if the new depot comes. So, one should not cancel blindly, because if an existing contract is simply terminated, state subsidies and tax benefits usually have to be fully repaid. Therefore, no one should act prematurely here. If at all, one should check very carefully whether a transfer from their existing Riester contract with the money to the retirement savings depot would be possible and sensible later, because that should also be possible. But simply canceling and hoping it will work out can backfire. Nevertheless, it applies, of course, that until the final conclusion of the legislative process and the introduction on 1.1.2027, individual parts can still change. Discussions are ongoing, but the direction is clear, and there have now been these improvements again, and precisely because of this, it is worthwhile to understand the topic today, because ultimately it affects almost all of us. And now I am really interested in your opinion. Is this finally the subsidy that we ETF savers have been waiting for for years, or is it ultimately just an old savings problem with a new label? Write it to me in the comments. I am curious to see how you and our community see the whole thing. And if the video helped you, then please give us a thumbs up and subscribe to the channel so that you don't miss this next change regarding the retirement savings depot and other important financial topics in the future. Thank you very much and see you in the next video.