At what age does switching from Riester pay off?

Tilman Freyenhagen

Published on 14 June 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

1. The 2027 Riester reform: why the switching question arises

Switching from an existing Riester-Rente (Germany's existing subsidised private pension) contract to the new Altersvorsorgedepot (the new state-subsidised retirement investment account, AVD) usually pays off in particular for savers with a remaining term of at least 10 to 15 years to retirement. The longer your investment horizon, the more reliably the higher expected equity return offsets the switching costs and the loss of contribution guarantees. There's no fixed age threshold, though, because the financial benefit always has to be calculated individually^[1]. From 1 January 2027, lawmakers are fundamentally reforming state-subsidised private pension provision. In place of the previous, often low-yielding Riester insurance policies comes the Altersvorsorgedepot, which allows flexible, higher-return investment in ETFs and equities without rigid gross contribution guarantees^[2].

From 2027, around 10 million active Riester policyholders face a pivotal question: keep the existing contract, or transfer the balance into a new account? The fundamental difference lies in the type of investment. Riester contracts are legally required to offer a contribution guarantee, which is why providers have to invest most contributions in low-risk but low-yielding interest-bearing assets. The Altersvorsorgedepot removes this strict guarantee requirement. Your capital can therefore work over the long term in broadly diversified global equity markets, which has historically produced significantly higher returns. Calculations backed by the BMF show that giving up the contribution guarantee substantially increases long-term return prospects^[1].

To secure the right decision for your personal situation, you should carefully analyse your remaining term and cost structure. Our knowledge section gives you source-based guidance. With the subsidy calculator you can work out the financial impact of switching, while our Vorsorgedepot-Lotse portal also gives you access to independent advice service by experts if you need it. All tendencies shown here are for illustration only; this is not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

2. The core maths: return advantage versus switching costs

When you consider transferring your accumulated Riester savings into the new Altersvorsorgedepot, two financial forces are at play. On one side is the prospect of significantly higher returns from a free, equity-based investment without expensive contribution guarantees. On the other side are the concrete switching costs charged by your old provider and the loss of the previous gross contribution guarantee. For the switch to pay off, the compound-interest effect of the future extra return has to fully offset these entry hurdles. Fortunately, lawmakers have capped the switching costs: they amount to a maximum of 150 euros in the first five years and are free of charge after that^[3]. But the real mathematical variable that determines success is the remaining term until you retire.

The rule of thumb makes clear that younger savers almost always benefit from switching, while close to retirement the risks of giving up the guarantee outweigh the benefits. To pin down the exact threshold for your personal situation, we developed the subsidy calculator. This tool runs a precise year-by-year projection and calculates the exact break-even age for your individual contract. For a comprehensive overview of the statutory requirements, our knowledge section is also available free of charge. Please note: all model calculations and comparisons are for illustration only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

3. The time factor: why remaining term is the most important metric

The time remaining until retirement is the mathematical foundation for deciding whether switching from the Riester-Rente to the new Altersvorsorgedepot pays off. Because lawmakers have set the earliest possible start of the tax-subsidised payout phase at age 65^[2], the difference between your current age and this threshold defines your personal remaining term. This remaining span directly determines how far the expected extra return of a high-return equity account can offset the switching costs and the loss of the contribution guarantee. The younger you are, the more strongly the maths tips in favour of the new account.

From a financial-mathematics perspective, a long remaining term significantly reduces the short-term volatility risk of a pure equity investment. While a pure ETF portfolio can show noticeable losses over a horizon of a few years, this risk levels out almost completely over historical periods of fifteen years or more. For older Riester savers, on the other hand, the loss of the contribution guarantee weighs heavily, because a market downturn shortly before the payout phase can barely be made up. To work through this complex dynamic for your own situation, a detailed calculation is worthwhile. Our purpose-built subsidy calculator calculates the exact break-even age for you based on your existing Riester contract and shows you in black and white from when switching becomes economically advantageous.

Please note: all mathematical tendencies and model calculations are provided purely for neutral guidance and do not constitute investment advice within the meaning of Section 1(1a) No. 1a KWG.

4. Rules of thumb by age group: from your twenties to retirement

The decision to switch from a Riester-Rente to the new Altersvorsorgedepot (AVD) depends primarily on your remaining term to retirement. As a rule of thumb: the longer your personal investment horizon, the more reliably the higher equity return of a low-cost ETF portfolio can offset the transfer fees and the loss of the contribution guarantee^[2]. For younger savers, switching is nearly always worthwhile, while contracts held by savers aged 50 and above need a highly precise case-by-case review.

For savers in their twenties and thirties, the decision is often mathematically clear-cut. The return forgone through the restrictive Riester guarantee far outweighs any switching costs. But for the age group between 40 and 50, switching also remains highly attractive, since the remaining decades are enough to offset temporary market downturns. For a switch within five years of concluding the contract, a statutory switching-cost cap of a maximum of 150 euros also applies; after five years, the transfer is free of charge from the provider.

The trade-off becomes more critical from age 50 onwards. At this point the remaining term shortens, so the Riester contract's contribution guarantee gains subjective value for security-minded savers. At this stage of life, every euro counts: how much Riester capital have you already saved? What costs does your existing provider charge? The subsidy calculator works out the exact delta between staying and switching for you. Also use the knowledge section to read up on the details of the Riester reform. (Important note: all model calculations and tendencies are provided purely for guidance and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

5. The hard facts: switching fees and state rules from 2027

For the switch of existing Riester contracts into the new Altersvorsorgedepot from 2027, lawmakers have created clear financial parameters to protect savers from excessive fees. Transferring capital is state-regulated and made attractive for consumers through statutory cost caps. Fees charged by the outgoing Riester provider are capped by law at a maximum of 150 euros during the first five years of the contract term, after which the provider must even make the switch completely free of charge. At the same time, the newly receiving provider may charge a one-off administration fee of no more than 150 euros for transferring the balance^[2]. These manageable costs mean the switch already pays for itself at a moderate remaining term, thanks to the higher expected return on the equity market.

Although the statutory hurdles are low, it's ultimately your individual remaining term that decides whether switching pays off. Because moving to the Altersvorsorgedepot means giving up the classic Riester contribution guarantees, you take on greater market-driven risk, which needs to be offset by a long investment horizon. The younger you are, the more strongly the compound-interest effect of the low-cost ETFs in the new account works, so that even the maximum switching costs of 300 euros in total barely register. Close to retirement, this advantage shrinks. To analyse your personal situation precisely, the subsidy calculator is available on our portal. This tool calculates the net result, taking your existing capital into account.

For a well-founded financial decision, it's advisable to compare not just the transfer fees but also the ongoing product costs. The knowledge section offers detailed comparisons of how reduced administration fees on a modern account play out over the long term. If you're unsure about the mathematical trade-off or would like a personal assessment, our independent advice service helps you get in touch with a qualified, licensed expert who will review your Riester history neutrally. Please note: the scenarios shown are for illustration; this is not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

6. Grandfathering: what happens to your existing Riester allowances?

One of the biggest worries for Riester savers thinking about switching systems concerns the assets they've already saved and the state subsidy. The knowledge section makes clear that the Federal Ministry of Finance (BMF) provides statutory clarity here: if you transfer your Riester capital directly into the new Altersvorsorgedepot, you benefit from comprehensive grandfathering^[2]. This transfer counts as subsidy-neutral, so switching is not classified as a detrimental use. All state allowances and tax benefits you've received in the past therefore remain fully yours, tax-free^[2].

• Keeping all the state Grundzulage (the basic state allowance) and Kinderzulage (the child allowance) payments credited to your Riester contract over the years.
• Securing all the tax benefits of the special-expenses deduction, with no repayment obligation.
• Tax-free transfer of all the capital you've built up directly into the new account model.
• No tax charge on the transfer itself, since no payout is made to the saver.

Although the statutory grandfathering protects the subsidies you've already received, switching is not a foregone conclusion. The decision depends primarily on your remaining term. Switching into a growth-oriented Altersvorsorgedepot without a contribution guarantee means giving up the old Riester guarantee. The longer your investment horizon to retirement, the more likely the higher expected equity return of a broadly diversified ETF portfolio is to offset this guarantee and any switching fees charged by your old provider. If retirement is close, on the other hand, the remaining time may not be enough to cushion market fluctuations, in which case sticking with your existing contract can be worthwhile.

To find out at what age and remaining term the switch pays off for your individual contract history, a precise mathematical check is advisable. Around 10 million active Riester savers face this consequential decision. With the subsidy calculator you can easily work out your personal break-even point. If you'd prefer a tailored analysis of your Riester allowances, you can use our Vorsorgedepot-Lotse portal's independent advice service to get in touch with a licensed expert. Please note: all calculations and comparisons are for illustration. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

7. Special case guarantee: when giving up Riester security hurts

The classic Riester-Rente attracts savers with a statutory gross contribution guarantee of 100 percent. What looks like maximum security at first glance often turns out to be a drag on returns in practice. To guarantee every contribution and state allowance paid in, in nominal terms, at the start of retirement, providers have to invest most of the capital in low-yield, fixed-interest securities. Especially during pronounced low-interest periods, this means barely any free capital can flow into higher-return asset classes like equities. The result is a creeping erosion of savings through inflation, while the real net return after costs hovers near zero. The new Altersvorsorgedepot therefore dispenses with rigid guarantee requirements, to give you full access to global capital markets^[2].

For risk-averse savers, lawmakers do plan to offer alternative subsidised contracts in future with a reduced guarantee of 80 percent, or still 100 percent^[2]. But every percentage point of nominal guarantee restricts fund managers' room for manoeuvre and costs you real money over the long term. If your remaining term to retirement is still more than ten or fifteen years, the historically proven equity market return usually reliably offsets the risk of short-term price fluctuations. Giving up the gross contribution guarantee barely hurts in this case, because the statistical expected value of an unconstrained ETF investment far exceeds the potential losses.

Whether switching is worthwhile for you personally, and at what age the higher equity return exceeds the switching costs, can be worked out with mathematical precision. In our knowledge section we provide you with comprehensive model calculations and comparisons. For a detailed calculation of your individual transfer scenario, you can use the subsidy calculator directly, which factors in the historical allowance structure and any switching fees and visualises your personal break-even point (note: all calculations are for illustration, not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

8. The path to your individual decision: calculator scenarios and advice

The decision to switch from an existing Riester contract to the new Altersvorsorgedepot depends heavily on your personal circumstances. Because every existing contract has its own history of acquisition costs, administration costs and state allowances, the question of the optimal switching point can't be answered the same way for every saver. The most important mathematical factor here is the remaining term to your planned retirement: the longer your investment horizon, the more reliably the higher expected equity return of the new account can offset the switching costs and the loss of the contribution guarantee. There's at least a statutory protection mechanism for the switch itself: the receiving provider may charge you no more than a flat fee of 150 euros for transferring the capital^[2].

To bring clarity to your own contract situation and work out the exact mathematical delta, our interactive subsidy calculator is available. This tool lets you enter your existing Riester capital, your ongoing own contributions and the historical allowance structure. On this basis, the calculator produces a source-based year-by-year projection of the two alternatives. You can see at a glance the exact break-even age at which giving up the contribution guarantee of your Riester contract pays off financially for you through the higher-return ETF investment in the account.

If your contract has a very complex structure, or if you'd like a professional assessment before signing, personal contact with experts is advisable. Through our independent advice service we put you in touch with qualified, independent financial advisers. In a free initial conversation, your individual pension situation is reviewed objectively, so you can make the decision with complete confidence. Our portal thus offers you both routes equally: independent digital calculation or well-founded support from human expertise.