Altersvorsorgedepot or ETF savings plan: which pays off more?

Tilman Freyenhagen

Published on 15 June 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The core comparison: subsidised Altersvorsorgedepot versus unsubsidised ETF savings plan

The choice between the new Altersvorsorgedepot and a conventional, unsubsidised ETF savings plan depends on your individual savings goals. For pure, long-term retirement provision, the subsidised Altersvorsorgedepot usually delivers a higher final capital sum than an equally funded ETF savings plan, thanks to state allowances, tax advantages and tax-free reinvestment. The unsubsidised ETF savings plan, on the other hand, scores with maximum flexibility, since it imposes no tie-in until retirement and offers availability at any time.

Regulated system versus free capital investment

From 2027, the Altersvorsorgedepot will fundamentally change private, state-subsidised retirement provision in Germany. In the Altersvorsorgereformgesetz, which has been passed and promulgated, lawmakers provide for substantial state support: personal contributions are supported with a Grundzulage of 50 percent on the first 360 euros and a further 25 percent on amounts up to 1,800 euros a year, allowing a maximum allowance of up to 540 euros annually^[1][8]. On top of that come tax advantages through the Sonderausgabenabzug (deduction as a special expense) and a tax-free accumulation phase in which no Vorabpauschale or capital gains tax applies. In exchange, the assets are earmarked for retirement provision until you reach pension age.

The comparisons and calculations shown are for purely illustrative purposes and do not constitute investment advice within the meaning of § 1 (1a) no. 1a KWG.

To find out which route is financially more advantageous for your personal situation, you can use our subsidy calculator. It compares the different subsidy scenarios transparently and on a source-based footing, using your own figures. In addition, our knowledge section has detailed background reports that support you neutrally on your way to self-directed wealth building.

The subsidy logic of the new Altersvorsorgedepot from 2027

The new Altersvorsorgedepot, from 2027, revolutionises state-subsidised private retirement provision in Germany with a highly attractive allowance system. While an unsubsidised ETF savings plan is funded solely out of your already-taxed net income, with the Altersvorsorgedepot direct state contributions flow into your account and start working from day one. These allowances noticeably increase your effective savings rate and, with it, your long-term investment capital, without requiring you to put in more of your own money.

The Grundzulage and Kinderzulage in detail

The subsidy logic is based on a clear percentage of your own contributions. For the first 360 euros of your personal contribution, you receive state support of 50 percent, equivalent to an allowance of 180 euros. For every further euro paid in, you receive a 25 percent contribution, up to a maximum state contribution of 540 euros a year on a personal contribution of 1,800 euros^[1]. Families additionally benefit from a Kinderzulage of up to 300 euros a year per child. These direct contributions substantially lower the barrier to long-term wealth building and represent a decisive advantage over unsubsidised forms of saving.

• Minimum personal contribution: to activate the state subsidy, you only need to pay in a minimum contribution of 120 euros a year yourself.
• Maximum Grundzulage: from 2027, the state contributes up to 540 euros per calendar year towards your contributions.
• Kinderzulage: for every child entitled to Kindergeld (state child benefit), you additionally receive an annual allowance of up to 300 euros.
• Berufseinsteiger-Bonus (career-starter bonus): young savers under 25 receive a one-off additional subsidy when they open a contract.

The Altersvorsorgedepot's real lever effect, however, comes from the direct reinvestment of these allowances. Because the state contributions flow directly into your chosen ETFs or funds, this extra capital grows over the decades through the compound-interest effect. Compared with a classic ETF savings plan, where you have to put up every euro yourself, this creates a clear return advantage. You can work out precisely how strongly this lever plays out in your personal situation with our subsidy calculator, or find out more in our knowledge section.

The ETF savings plan: unmatched flexibility and availability

While the state-subsidised Altersvorsorgedepot, from 2027, promises substantial financial benefits through allowances and tax deferral, the classic, unsubsidised ETF savings plan remains unbeatable on flexibility. With it, you take on no contractual or statutory tie-in to any particular age limit. If your life plans change — say, through a wish to own property, becoming self-employed, or unforeseen financial difficulties — you can access your invested capital at any time, without giving a reason. There are no state rules that penalise early withdrawal or require you to repay benefits received, as is the case with the subsidised account in the event of an early, subsidy-damaging use of funds^[2].

This unconditional freedom of action is a decisive factor for modern life planning. With the unsubsidised account, you also benefit from an unlimited choice of brokers, neobrokers and thousands of ETFs eligible for savings plans. You're not restricted to providers certified by lawmakers or to selected asset classes. For self-directed savers who manage their finances independently, this independence is often the strongest argument against a fixed tie-in. Even so, you don't necessarily have to make an either-or decision. Many investors use the unsubsidised savings plan for medium-term goals and combine it with a subsidised account for pure retirement provision. To analyse the financial differences for your personal situation precisely, our subsidy calculator is available to you. You'll find further well-founded analysis in our knowledge section.

The tax advantage: the Vorabpauschale and tax deferral in detail

A decisive lever for your expected final capital lies in the tax treatment during the decades-long accumulation phase. With the classic, unsubsidised ETF savings plan, returns, dividends and realised gains above the Sparer-Pauschbetrag (the saver's tax-free allowance) are subject to the annual capital gains tax of 25 percent, plus the solidarity surcharge and, where applicable, church tax. In addition, since the investment tax reform, investors have had to pay tax each year on the so-called Vorabpauschale, an advance lump-sum tax on unrealised gains, which causes a regular drain on liquidity and noticeably slows the compound-interest effect. In the new Altersvorsorgedepot, these levies are fully waived during the accumulation phase^[3].

This deferral of taxation, also known as tax deferral (Steuerstundung), means every euro you earn stays in the account undiminished and can keep working for you. Rebalancing — selling one fund and then buying another security — is also tax-free within the Altersvorsorgedepot. With a conventional account, by contrast, every active sale would immediately trigger capital gains tax on the realised profits. You can work out precisely how this compound-interest advantage and the state allowances affect your assets with our subsidy calculator.

• Vorabpauschale: waived entirely for the Altersvorsorgedepot; levied annually on undistributed gains in a regular ETF savings plan.
• Capital gains tax on dividends: doesn't apply to the Altersvorsorgedepot during the accumulation phase; with an ETF savings plan it's deducted directly on distribution.
• Rebalancing and reallocation: possible tax-neutrally in the subsidised account; in an unsubsidised ETF account, every sale at a profit triggers a tax liability.
• Taxation in the payout phase: the Altersvorsorgedepot is taxed under deferred taxation at your personal tax rate, while the ETF savings plan taxes only the gains, with capital gains tax.

In summary, by systematically dispensing with annual tax deductions, the Altersvorsorgedepot has markedly higher mathematical efficiency for long-term wealth building. Taxation only occurs on payout in retirement, when your personal tax rate is often lower than during your working life. Note: these tax comparisons are an illustrative representation of the statutory framework as it currently stands. Not investment advice within the meaning of § 1 (1a) no. 1a KWG.

Taxation in the payout phase: deferred taxation vs. capital gains tax

A full comparison of the two provision models absolutely requires a look at the payout phase, since completely different tax rules apply here. With the state-subsidised Altersvorsorgedepot, the so-called deferred taxation applies. That means all payouts in retirement must be taxed as other income at your personal income tax rate, which in retirement is usually markedly lower than during active working life^[4]. Against that stands the unsubsidised ETF savings plan, where in the payout phase you only pay tax on the actual capital gains, at the 25 percent capital gains tax rate plus solidarity surcharge and, where applicable, church tax^[5].

An important factor with the unsubsidised ETF savings plan is the partial exemption (Teilfreistellung) for equity funds. For pure equity ETFs, 30 percent of gains remain tax-free, which reduces the effective tax rate to around 18.46 percent^[5]. This partial exemption doesn't exist for the Altersvorsorgedepot, because of its deferred taxation. However, over the decades-long accumulation phase, the Altersvorsorgedepot benefits from a substantial tax-deferral effect, since dividends and capital gains are reinvested tax-free and no annual Vorabpauschale applies. Which model ultimately delivers the higher net return therefore depends heavily on your individual tax rate in retirement.

To find out which route is economically more worthwhile for you, a close comparison is advisable. Use our subsidy calculator on our portal for that, to run a source-based, transparent simulation for your personal life situation. Note: these model calculations and comparisons are for orientation and general information only. They do not constitute investment advice within the meaning of § 1 (1a) no. 1a KWG.

Worked example: which model delivers more final capital in the end?

To transparently compare the financial dynamics between a subsidised Altersvorsorgedepot and an unsubsidised ETF savings plan, let's look at a realistic scenario for self-directed savers. A saver pays in 150 euros a month (1,800 euros a year) from their own funds over a 30-year period. An average market return of 6.0 percent a year is assumed. With the Altersvorsorgedepot, the state Grundzulage of 540 euros a year additionally flows directly into the investment^[6].

This worked example illustrates the substantial lever of the state subsidy and the tax-deferral effect. Although this scenario assumes slightly higher effective costs of 0.5 percent a year for the Altersvorsorgedepot than for the low-cost, unsubsidised ETF savings plan at 0.2 percent, the subsidised model ends up clearly ahead. The annual allowance of 540 euros^[6] offsets the fee difference and produces a lead in net final capital of over 13,000 euros. For a precise analysis tailored to your personal income and family situation, you can use the subsidy calculator to compare both options in detail.

Further mathematical background and detailed guides on the tax rules from 2027 can be found in the knowledge section.

Important note: these calculations are for information purposes only. They are a model illustration and not investment advice within the meaning of § 1 (1a) no. 1a KWG. Actual performance and tax effects depend on future market developments and your individual tax situation.

Costs and product fees as return-eaters

The Altersvorsorgedepot's state subsidy only unfolds its full effect if product fees don't quietly eat into the return. While the standard product is subject to a statutory cost cap of 1 percent effective costs per year^[7], over a decades-long accumulation phase that figure still means a significant loss of compound interest. For self-directed savers who want to structure their retirement provision cost-efficiently, such fees are an unnecessary drain on returns. By comparison: an unsubsidised ETF savings plan with a low-cost broker often costs less than 0.2 percent a year in fund costs (TER), with no account fees at all. Anyone who relies on expensive legacy contracts or classic sales-driven products for their Altersvorsorgedepot gives away a large part of the state bonus.

To avoid this cost trap, you should analyse offers carefully. Switching from expensive Riester tariffs to a modern, subsidised account can pay off quickly, thanks to the statutory switching-cost cap of a maximum of 150 euros^[7]. For a targeted choice of broker, our provider comparison is available to you. This tool helps you identify providers with minimal account and transaction fees, so your subsidy flows directly into your wealth building. Want to calculate the exact impact of different cost scenarios on your future pension? Use the subsidy calculator on our knowledge section to compare the long-term cost impact transparently and neutrally.

Decision guide: which model is right for you, and when

The question of whether the Altersvorsorgedepot or a classic ETF savings plan is the better choice can be answered based on your savings goal: for pure retirement provision, the subsidised account is usually superior thanks to its tax advantages, while the unsubsidised savings plan wins out for flexible, medium-term goals. Anyone wanting to make optimal use of the state subsidy from 2027 benefits, with the Altersvorsorgedepot, from direct allowances and a tax-free accumulation phase^[2].

The new Altersvorsorgedepot is the first choice for consistently building wealth towards retirement. Because capital gains and dividends are reinvested tax-free during the accumulation phase, your capital benefits maximally from the compound-interest effect. The unsubsidised ETF savings plan, by contrast, remains the ideal tool if you need financial flexibility: should you need money early for a property or unplanned expenses, you can access your account at any time, with no tax penalty deductions.

• Altersvorsorgedepot: the best possible net-of-tax return for your retirement goal, through allowances and full tax deferral during the savings phase.
• ETF savings plan: unrestricted liquidity and availability of capital at any time before retirement, subject to regular capital gains tax.
• Combination: splitting your savings rate secures the state subsidies while keeping capital flexible for life events.

Combining both models proves to be the economically smartest strategy for many self-directed savers. You can pay exactly the amount into the Altersvorsorgedepot each month that's needed to secure the maximum state allowances. Any surplus savings flow in parallel into an unsubsidised ETF savings plan. That way, you make full use of the state subsidy while retaining the financial freedom you need for medium-term life goals.

To calculate the exact impact on your personal financial planning, our free subsidy calculator is available to you. It compares the state-subsidised variant directly with an unsubsidised account. Our knowledge section offers additional detail and neutral comparisons, where the Vorsorgeratgeber (retirement provision guide) supports you as a neutral guide in your provision decision.