Altersvorsorgedepot and the statutory pension: how they fit together

Tilman Freyenhagen

Published on 30 July 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The three-pillar model: where does the Altersvorsorgedepot fit in?

The German retirement-provision system is structurally divided into three pillars. The Altersvorsorgedepot, introduced by the Altersvorsorgereformgesetz (Retirement Savings Reform Act) from 1 January 2027, sits in the 3rd pillar as state-subsidised private provision. It serves as a capital-market-based supplement to statutory pension insurance (1st pillar) and to occupational retirement provision (2nd pillar). Payouts from the account reduce neither your accrued earnings points nor your pension entitlements, because both provision systems are administered as fully separate legal spheres.

The three pillars of retirement provision compared

Separate legal spheres, with no offsetting against your pension

Because statutory pension insurance operates as a pay-as-you-go system, while the Altersvorsorgedepot is structured as an inheritable, capital-funded ring-fenced asset, there is no mutual offsetting between the two routes. An increase in your account's value therefore leads to no reduction whatsoever in your statutory pension. At the same time, you benefit from the tax advantages and state bonuses of the 2027 key parameters, without losing flexibility in the later payout. The private capital investment in the Altersvorsorgedepot thus deliberately closes the emerging pension gap, while your entitlement to the state pension remains in full.

No offsetting: how the Altersvorsorgedepot and your pension are kept legally separate

The Altersvorsorgedepot (AVD) and statutory pension insurance are two provision systems that are fully separate from each other in law. Payouts from the state-subsidised account have no reducing effect whatsoever on your statutory pension and are not offset against your accumulated earnings points. As capital-market-based private provision in the third pillar, the Altersvorsorgedepot supplements the statutory basic pension of the first pillar, without reducing its amount or being netted against it.

The three-pillar system and its legal basis

The statutory pension rests on Book Six of the Social Code (Sozialgesetzbuch, SGB VI) and follows the pay-as-you-go method of statutory pension insurance. The Altersvorsorgedepot, introduced as part of the pension reform, is by contrast subject to its own, legally independent framework. This legal separation gives savers three key points:

• Protection of your earnings points: every pension point you earn stays untouched in your pension account. A high final capital or high returns in the Altersvorsorgedepot do not reduce the value of your earnings points.
• Separate administering bodies: the Deutsche Rentenversicherung (Germany's statutory pension insurer) administers only the statutory pension. The Altersvorsorgedepot is run independently through certified product providers such as neobrokers, banks or fund companies.
• An independent payout phase: payouts from the account from the start of retirement constitute separate income. The system of deferred taxation governs how this is taxed in retirement, but does not affect the amount of the statutory pension paid out.

For your individual financial planning, this means absolute clarity: the Altersvorsorgedepot serves primarily to gradually close the demographically driven pension gap in the statutory pension. We can state clearly that both provision building blocks exist side by side, and you can use the state subsidies without having to fear any restriction on your statutory pension rights.

Closing the pension gap: why the statutory pension alone is often not enough

Statutory pension insurance forms the foundation of retirement provision in Germany, but because of demographic change it rarely secures your accustomed standard of living in retirement on its own. The pay-as-you-go method comes under pressure as more and more pensioners are funded by fewer contributing workers. The statutory pre-tax security level measures the ratio of a standard pension after 45 contribution years to average income, and is set by law at a minimum of 48 percent through 2025^[1]. Closing a looming provision gap in old age requires capital-funded supplements.

The three-pillar system and the role of the Altersvorsorgedepot

To provide a targeted supplement to the statutory pension, the German provision system is built on three legally separate pillars. While the first pillar guarantees basic provision, the Altersvorsorgedepot, starting in 2027, serves as a state-subsidised, capital-market-based supplement in the third pillar. A key advantage of this system lies in the legal separation: payouts and returns from the account reduce neither your accrued earnings points nor your payout entitlements from statutory pension insurance.

• First pillar (statutory pension): pay-as-you-go basic cover, whose amount is determined by the earnings points you have personally accrued.
• Second pillar (occupational retirement provision): company pensions financed by the employer or funded through salary conversion.
• Third pillar (private provision & AVD): capital-funded private provision, in which high-return asset classes such as ETFs are used specifically to close the pension gap.

By combining a reliable basic pension from the first pillar with the return potential of the Altersvorsorgedepot, you can reliably reach your target income level in retirement, without the individual provision building blocks interfering with one another.

The accumulation phase compared: paying contributions and tax treatment

While statutory pension insurance is based on the pay-as-you-go method, in which ongoing contributions are used directly to fund the current generation of pensioners, the Altersvorsorgedepot relies on individual, capital-market-based wealth-building. As a state-subsidised instrument of the third pillar, the account supplements your entitlements from the first pillar. Because both provision systems are strictly separate in law, payouts from the account affect neither your accrued earnings points nor the calculation of your statutory pension.

Tax privileges and direct allowances at a glance

• State basic allowance: if you use your maximum personal contribution in full, you receive an annual basic allowance (Grundzulage) of up to 540 euros.
• Tax-free growth: all capital gains, dividends and interest income remain free of capital gains tax throughout the entire accumulation phase.
• Full capital-market potential: flexibility in fund selection means you can use low-cost ETFs to significantly increase return potential compared with classic interest-bearing products.

The combination of state contributions and tax exemption creates a pronounced compound-interest effect. Because returns are not reduced by capital gains tax during the savings phase, the full substance remains in the account and keeps working continuously. Only in the later payout phase is the balance taxed at your personal income tax rate, under the rules of deferred taxation. To make the most of this effect, you will find further worked examples for different income brackets in our guide to the tax subsidy. (Note: all calculations and model computations are for illustration only; not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

The payout phase: how pension and account payouts are combined

In retirement, statutory pension insurance and the Altersvorsorgedepot form two legally independent income streams that complement each other. While the statutory pension, as the 1st pillar of the provision system, provides lifelong monthly basic cover, the Altersvorsorgedepot acts from 2027 as a flexible, capital-market-based component. Because payouts from the account reduce neither your accrued earnings points nor your statutory pension entitlement, the two pillars come together in retirement with no mutual offsetting.

Flexible payout forms and tax treatment compared

On entering retirement, the system draws a clear distinction between the statutory pension and withdrawals from the Altersvorsorgedepot. For the account, from the statutorily defined start of the payout phase, you can choose flexible models such as drawdown plans or conversion into a pension insurance policy. For tax purposes, the account is governed by the principle of deferred taxation, with your payouts taxed in retirement at your personal income tax rate. We have set out detailed information on the tax mechanics in our guide to the taxation of the Altersvorsorgedepot.

Combining a guaranteed basic pension with the return-oriented payouts from the account lets you close your individual pension gap in a structured way. Please note: all model calculations and tax information shown are for orientation only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The Altersvorsorgedepot as a building block in your overall portfolio

The new Altersvorsorgedepot supplements statutory pension insurance as a return-oriented third pillar of retirement provision, without reducing existing pension entitlements. Because both systems exist side by side, fully separate in law, payouts from the account lead to no offsetting or reduction of your statutory earnings points. In our view as a neutral guide, the strategic value lies in this dual diversification between the pay-as-you-go system and the capital market.

Spreading risk through the pay-as-you-go method and capital funding

• Statutory pension (1st pillar): based on the pay-as-you-go method, it secures contribution-linked basic cover and protects against your individual longevity risk.
• Altersvorsorgedepot (3rd pillar): uses the capital-funding method through opportunity-oriented investments such as ETFs, closing the provision gap through market returns.
• Flexible savings rates: adjustable monthly contributions let savers build individual provision independent of fixed statutory contribution rates.

While the statutory pension is tied to wage growth, a broadly diversified ETF investment in the Altersvorsorgedepot opens up, over long accumulation phases, higher return potential of historically up to 11.5 percent a year on global equity markets. You can adjust your savings rate flexibly at any time. To precisely determine your subsidy and how your final capital will develop, we provide the subsidy calculator. (Note: not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Who benefits from combining the statutory pension and the Altersvorsorgedepot

As the first pillar, the statutory pension forms the foundation of retirement provision in Germany, but is often no longer enough on its own to maintain your accustomed standard of living in old age. The Altersvorsorgedepot, starting in 2027, offers a capital-market-based supplement as a state-subsidised form of provision in the third pillar^[3]. Because both provision systems are administered as strictly separate in law, the Altersvorsorgedepot has no negative effect whatsoever on your accrued earnings points or on the payout rate of your statutory pension. We see the decisive advantage in this legal independence: the capital built up in the account flows to you in retirement in addition to the statutory pension, with no netting against it.

Three core groups particularly benefit from this parallel system structure

• Employees subject to compulsory pension insurance: if you are compulsorily insured, you use the statutory pension as reliable basic protection against biometric risks and build a targeted, supplementary ETF-based return through the Altersvorsorgedepot, to close the looming pension gap.
• Young families entitled to the child allowance (Kinderzulage): state allowances for parents can significantly reduce the personal-contribution share in the account. Combined with contribution periods in the statutory pension, this creates highly effective wealth-building for families with children.
• Self-employed people making voluntary contributions: self-employed people who pay voluntarily into statutory pension insurance, or who provide for retirement purely privately, also benefit from 2027 for the first time from full state subsidy of the Altersvorsorgedepot, as a flexible supplement to their retirement planning.

By dispensing with rigid contribution guarantees, the Altersvorsorgedepot lets savers tap into the higher return potential of international equity markets, while the statutory pension guarantees reliable basic security. If you want to check which subsidy criteria apply to your own life situation, you will find comprehensive detailed information on subsidy eligibility for the Altersvorsorgedepot. Combining both pillars thus enables a balanced mix of security and long-term growth.

Action steps for optimally linking your pension and your account

To optimally combine the statutory pension and the new Altersvorsorgedepot, we recommend a structured approach. Because both systems exist separately in law, payouts from the account reduce neither your pension points nor your later pension entitlements. The step-by-step guide below shows you how to work out your individual provision needs and set the right course.

1. Check your pension information: analyse your annual statement from the Deutsche Rentenversicherung to determine your expected gross pension and the existing provision gap in old age.
2. Calculate your subsidy: use our subsidy calculator to precisely work out the level of the state allowance, the tax advantages, and the forecast final capital of your account.
3. Choose how to proceed: depending on your personal preference, decide between independent digital management through a neobroker or using our independent advice service for personal support.
4. Set up your savings rate: make sure your account is properly opened and complete the necessary steps to set up the Altersvorsorgedepot, including an automated ETF savings rate and your allowance application.

Whether a self-directed digital solution or a conversation with an expert is the right path for you depends on your experience and preferences. The earlier you combine your statutory pension with the Altersvorsorgedepot, the more effectively you close your pension gap. Detailed criteria for choosing between automated management and personal advice will support you in making a well-founded decision.