Starting the Altersvorsorgedepot at 45: the late-start numbers

Katrin Straub

Published on 15 July 2026 · Updated on 7 August 2026 · Managing Director, imatch GmbH

Why 45 is not too late to start with equity ETFs

Starting late at 45 is by no means too late. It offers excellent prospects for building profitable wealth. With a regular retirement age of 67, you have an investment horizon of exactly 22 years. Statistically, this period is entirely enough to reliably smooth out short-term market swings and benefit from the long-term performance of global equity markets. This long time horizon is also a decisive advantage when it comes to the question of how large a share to allocate to an equity ETF within the Altersvorsorgedepot.

Historical evidence: the 15-year rule in the stock market

Historical analysis by the Deutsches Aktieninstitut (DAI) shows that, in the past, investors with a broadly diversified portfolio and an investment horizon of at least 15 years never once suffered a loss^[1]. On the contrary: even at unfavourable entry points, the average annual return stayed positive, while the historical average often ran between 7% and 9% a year^[1]. With your remaining 22 years until retirement, you sit comfortably above this critical threshold. This makes the decision to switch, for instance as part of a switch from Riester to a modern, equity-based Altersvorsorgedepot, mathematically highly attractive.

• Smoothing out market cycles: a 22-year period typically spans several economic cycles, so crisis phases such as the 2008 financial crisis or the dot-com bubble are fully evened out.
• Powerful compounding: because returns inside the Altersvorsorgedepot can be reinvested tax-free, compounding reaches its maximum momentum especially in the second half of the term.
• No contribution guarantees: unlike old Riester-Rente (Germany's existing subsidised private pension) contracts, the Altersvorsorgedepot has no requirement for a nominal contribution guarantee, so your capital stays invested in high-return equities throughout.

Through the knowledge section, you get access to all the legal foundations and further analysis for your retirement planning. We explicitly point out that historical performance is no reliable indicator of future returns. Calculations and historical comparisons are for illustrative purposes only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

State support from 2027 in detail: how your Altersvorsorgedepot benefits

Starting the new Altersvorsorgedepot at 45 leaves you exactly 22 years until the regular retirement age of 67. On global equity markets, this period has historically proven excellent for smoothing out normal fluctuations and benefiting from the long-term growth of broadly diversified portfolios^[2]. From 1 January 2027, a new subsidy model applies: the state pays a Grundzulage proportional to your contribution, at 30 percent of your own savings contribution. If you pay in €1,800 a year, you secure the maximum state Grundzulage of €540^[2]. You can find out how to split your contributions optimally to make the most of this state support in our guide to the maximum subsidy.

• Annual own share: you pay in €1,800 yourself (equivalent to €150 a month).
• State Grundzulage: the state contributes €540 a year (a 30 percent subsidy rate).
• Total investment: this means €2,340 flows directly into your broadly diversified ETF portfolio every year.
• The extra effect over 22 years: the state allowances alone add up to a substantial €11,880, before any interest.

Thanks to compounding, these state allowances build considerable leverage over the remaining term of more than two decades. Even at a conservatively assumed annual ETF return of 5 percent, your account grows markedly faster than an unsubsidised standard savings plan, thanks to the state contributions, because the allowances are continuously reinvested. This clearly shows the leverage the AVD subsidy provides for your wealth building. To work through your personal situation precisely and neutrally, our free subsidy calculator is available to you. This tool reliably establishes your projected final capital and makes the exact cost effect transparent.

Note on the calculations: all figures and projections quoted are for illustration and are indicative. They depend on actual market developments. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Maximising the tax benefits: the Sonderausgabenabzug for a late start

Anyone starting the Altersvorsorgedepot at 45 is often in their career's highest-earning years. That also means a higher tax burden, which can, however, be deliberately used as a return lever. Through the Sonderausgabenabzug, you can claim your contributions for tax purposes. The legislator provides that you can deduct contributions directly up to a certain limit. For a late starter, this substantially raises your net savings rate, since a sizeable share of your contributions is refunded directly by the tax office via your tax return. As a result, less money goes to the taxman and more wealth stays in your long-term pension provision.

Specifically, under the current statutory rules for the Altersvorsorgedepot, savers can claim up to a total of €2,340 a year as special expenses (Sonderausgaben)^[3]. The tax saving depends on your personal marginal tax rate. Someone with a marginal tax rate of 35 percent during their peak earning years, for example, secures an annual tax refund of around €819^[3]. This tax effect acts like an immediate, guaranteed return on your contributions. How much tax you can save in your personal situation can be worked out precisely using the subsidy calculator. Getting the structure of your annual contributions right is key to obtaining the maximum subsidy.

Over a 22-year accumulation phase to the regular retirement age of 67, this tax effect adds up enormously. From the annual tax saving of €819 alone, a calculated €18,018 flows back to you over the whole period. If you consistently reinvest these annual tax refunds, a considerable compounding effect arises, further accelerating your late start. The AVD subsidy thus proves a highly efficient tool, especially for well-earning employees in their prime working years. Please note: these calculations are for illustration only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Worked example: the Altersvorsorgedepot after 22 years, compared directly

Starting at 45 leaves you exactly 22 years until you retire at 67, an ideal time horizon for smoothing out equity market fluctuations. If you pay in €150 a month (€1,800 a year), you secure the maximum subsidy in the form of the full state Grundzulage of €540 a year^[4]. As a result, a total of €2,340 flows into your investment every year, whereas with an unsubsidised ETF savings plan only your own €1,800 is at work. With our subsidy calculator, you can trace this dynamic individually for different contribution rates. The additional AVD subsidy acts here as a massive lever on your personal return.

This projection shows just how strongly the allowances play out over a 22-year term thanks to compounding. The extra final capital of over €23,000 comes purely from state support, without you having to put in more of your own money. You also benefit during the accumulation phase from the Sonderausgabenabzug, which can further reduce your tax burden^[4]. To find the most cost-effective offer with low fees for you, a provider comparison helps in choosing the right account. Please note: these calculations are illustrative and depend on actual market developments. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Making higher contributions work: when voluntary payments up to €6,840 make sense

For late starters at 45, every euro invested counts towards building wealth, since the remaining time to save before retirement is limited to exactly 22 years. With the launch of the Altersvorsorgedepot on 1 January 2027, there is a new, often underrated lever: voluntary top-up payments above the subsidised threshold. Under the rules of the Bundesministerium der Finanzen (Federal Ministry of Finance, BMF), you can pay up to €6,840 a year into your Altersvorsorgedepot to benefit from the tax advantages of the accumulation phase^[4]. While state allowances and immediate tax deductibility are capped at an annual own contribution of €1,800, the portion above that, up to the ceiling of €6,840, remains highly attractive for tax purposes.

The decisive lever lies in the tax-free accumulation phase inside the subsidised account. All the gains, dividends and interest income you generate with your ETF investments over the 22-year term stay completely exempt from German capital gains tax (Abgeltungsteuer) and the Vorabpauschale (advance lump-sum tax) throughout this time. Taxation only takes place later, in the payout phase during retirement. This deferred tax effect closes the so-called tax leak, letting the untaxed returns maximise compounding year after year. Anyone wanting to make full use of the tax framework and the subsidy limits can find all the details in the guide to the maximum subsidy.

• Tax-free reinvestment: dividends and capital gains flow straight back into new ETF units without any tax deduction.
• Effective compounding: the remaining capital keeps working undisturbed over 22 years, which substantially increases the final capital compared with a conventional, taxable account.
• Flexible adjustment: you can flexibly adjust the size of your voluntary contributions to your current liquidity in every calendar year.

These mathematical advantages show that the Altersvorsorgedepot is a highly efficient instrument even when you start at 45. Our neutral knowledge section, along with the interactive subsidy calculator, is available for checking your personal situation individually. Whichever you prefer, organising your provision yourself as a self-directed investor or using our personal independent advice service, this transparency helps you reach a well-founded decision. (Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Switching an existing Riester contract: what 45-year-olds need to know now

Many savers around 45 hold old, often poorly performing Riester contracts, where high administration fees eat into returns. Since exactly 22 years remain until the regular retirement age of 67, switching to the low-cost, ETF-based Altersvorsorgedepot from 2027 is worthwhile in most cases. Such a switch finally lets you benefit from the market-standard returns of global equity ETFs, while your remaining accumulation phase is long enough to reliably smooth out short-term market swings.

The law provides consumer-friendly rules for this transition. If you transfer your balance, the switching costs incurred are statutorily capped at a maximum of €150^[5]. After five years with the new provider, the transfer is even entirely fee-free. A decisive advantage of this switch from Riester is that all your existing state allowances and tax benefits are preserved, transferred tax-free into your new account.

• Full balance transfer: your accumulated Riester capital flows directly into the new Altersvorsorgedepot to be invested there cost-effectively in ETFs.
• Contribution waiver: you leave the existing capital in the Riester contract and pay only into the new Altersvorsorgedepot from 2027.
• Continuing the old contract: you keep the contract running unchanged, which usually only makes sense with a very short remaining term or a high guaranteed annuity factor.

A sample model calculation illustrates the potential: if a 45-year-old saver transfers an accumulated Riester balance of €15,000 into the new account and keeps saving €150 a month, at an assumed ETF return of 6 percent a year, the balance grows to around €114,000 over 22 years. With a classic Riester contract carrying high ongoing costs, the end result would often be tens of thousands of euros lower. For a precise calculation tailored to your personal situation, you can use the subsidy calculator. Please note: these calculations are illustrative and do not constitute a guarantee. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Keeping an eye on costs: how account fees eat into your future pension

Anyone starting the new Altersvorsorgedepot at 45 has an accumulation phase of exactly 22 years ahead of them before the regular retirement age of 67. In this manageable but still worthwhile period, maximum cost efficiency is the decisive lever for getting the most out of your contributions. Every percentage point a provider retains in administration or account fees directly eats into the compounding effect. While a low-cost ETF savings plan at a modern account provider is often available for minimal fees, classic pension insurance policies frequently burden the capital with annual costs of 1.0 percent or more. Over a 22-year term, this seemingly small difference can reduce your final retirement capital by a five-figure sum.

• Account maintenance: many neobrokers offer completely fee-free account maintenance, while traditional branch banks charge fixed annual fees.
• Transaction costs: buying ETFs automatically should incur no execution fees, or only minimal ones.
• Product costs (TER): the total expense ratio of the chosen ETF should ideally be between 0.05 and 0.25 percent a year.
• Additional services: ongoing fees for advice or portfolio management should be clearly disclosed and only paid where they offer genuine added value.

To illustrate the impact of fees, a simple, illustrative calculation helps: with a monthly contribution of €150 and an assumed annual return of 6 percent before costs, wealth grows to around €78,000 over 22 years^[6]. If the return is reduced by a high effective cost ratio at the provider, say 1.2 percent, down to a net 4.8 percent, only around €66,000 remains at the end, equivalent to a loss of more than €12,000 through fees. Our source-backed methodology shows that, especially for a late start, every euro saved on fees acts like a return turbo. Whether a modern neobroker or a bank best suits your strategy depends on your personal need for advice.

Please note: these calculations are purely illustrative and do not represent a guarantee of future performance (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.).

Two ways to get started: the optimal start at 45

If you start the new Altersvorsorgedepot at 45, two equally valid implementation routes are open to you for making the most of the remaining 22-year window until retirement. For your personal pension route, you can either act as a self-directed investor or seek qualified support. Both paths let you efficiently invest the tax-subsidised cap of up to €1,800 a year and benefit from the Sonderausgabenabzug^[4]. (Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

The first route suits decisive savers who like to manage their finances themselves. Through a neobroker, the Altersvorsorgedepot can be run with minimal administration fees, which maximises the long-term compounding effect. You choose your own ETFs and adjust your portfolio flexibly. Our tool, the provider comparison, helps you find the most suitable account providers with the lowest fee structures for your late start. You can also use the subsidy calculator to simulate the precise tax effects and allowances for your personal income situation in detail.

The second route suits savers who prefer structured guidance and human expertise. A qualified, independent financial adviser helps you align your investment strategy with your time horizon and make precise use of tax synergies. If you choose this route, our independent advice service connects you, free of charge and without complication, to a licensed partner who provides expert support. Whichever path you choose, the knowledge section always gives you reliable, source-backed guides for every step.

• The self-directed path offers full control, maximum savings on account fees, and quick digital handling via a neobroker app.
• The advisory path offers tailored portfolio structuring, personal protection against market swings and professional tax optimisation.
• Both routes make full use of state support and secure tax-free wealth building during the accumulation phase.