Example calculation for single parents: the AVD with the Kinderzulage

Katrin Straub

Published on 15 July 2026 · Managing Director, imatch GmbH

Why the Altersvorsorgedepot is a genuine milestone for single parents

For single parents, the new Altersvorsorgedepot represents a genuine financial milestone from 2027, since the state Kinderzulage of up to 300 euros per child doubles own payments at a 1:1 ratio, making it possible to build a solid retirement nest egg with minimal own effort^[1]. Even with the statutory minimum contribution of 120 euros a year, you can open and save into a state-subsidised ETF account, which makes private provision highly attractive even for low earners and people with tight monthly budgets. Thanks to the elimination of rigid contribution guarantees, the capital flows directly into high-return asset classes, which maximises the long-term leverage of the allowances.

The enormous leverage of the state allowances

Compared with classic private pension provision, where every euro has to be saved entirely from your own net income, the state gives you massive support with the Altersvorsorgedepot. The subsidy is designed so that smaller contributions in particular are disproportionately boosted by the allowances. If you have one child, for example, and pay in the minimum contribution, your annual savings rate doubles through the state contributions with no further effort on your part^[1]. This effectively offsets the financial constraints that single-parent households often face day to day.

• Grundzulage: the state subsidises your payments with a Grundzulage of 50 percent for amounts up to 360 euros, plus a further 25 percent for amounts up to 1,800 euros, equivalent to a maximum annual Grundzulage of 540 euros.
• Kinderzulage: for every child entitled to Kindergeld, you receive an allowance of up to 300 euros a year, credited through a direct 1:1 match of your own contributions.
• Small own share: to claim the full family subsidy, you only need to raise your minimum contribution of 120 euros a year, or 10 euros a month, yourself.

Whether you take charge yourself as a digital self-decider via the provider comparison, or use the independent advice service to find a suitable expert for a personal conversation - the new system adapts flexibly to your life situation.

How the new subsidy works: the Grundzulage and Kinderzulage explained

From 1 January 2027, the new Altersvorsorgedepot replaces the Riester-Rente and introduces a much simplified subsidy system. For you as a single parent, this model offers a financial lever specifically geared to smaller monthly budgets. Going forward, state support is split into two main pillars: a contribution-linked Grundzulage and a highly effective Kinderzulage, which directly multiplies your own payments.

The Grundzulage: a percentage top-up from the very first euro

The baseline subsidy rewards every euro you save. For the first 360 euros you pay in each year, you receive a state contribution of 50 percent, which immediately means 180 euros in additional subsidy. The state subsidises every further euro up to a maximum contribution of 1,800 euros at 25 percent. This means you can reach a maximum Grundzulage of up to 540 euros a year^[2]. To be entitled to the allowance at all, you only need to make the statutory minimum contribution of 120 euros a year.

The Kinderzulage: the lever for single-parent families

For single parents, the biggest advantage lies in the reformed Kinderzulage. For every child entitled to Kindergeld, you receive a direct 1:1 subsidy. If you pay up to 300 euros a year per child into your account, the state doubles that amount with a further 300 euros. With two children, up to 600 euros in state allowances thus flow directly into your account, without you having to raise a large sum yourself.

• Grundzulage: a 50 percent contribution for the first 360 euros of own contribution, then 25 percent for every further euro up to 1,800 euros.
• Kinderzulage: a full 1:1 contribution of up to 300 euros a year per child, for a maximum own contribution of 300 euros.
• Minimum contribution: a flat base contribution of 120 euros a year is enough to activate the subsidy.
• Tax component: alongside the allowances, the Sonderausgabenabzug (special-expenses deduction) is retained, and is checked as part of your income tax return.

This combination means that single parents and families can build solid private pension provision with a very low net outlay of their own. For a precise calculation of your individual subsidy rate, our subsidy calculator is available to you. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The minimum own contribution: how much do single parents actually have to pay in themselves?

For single parents, financial room to manoeuvre in everyday life is often tight. The new Altersvorsorgedepot offers a decisive advantage here: to be eligible for the state subsidy at all, you don't need to raise much money out of your own pocket. The statutory minimum contribution is just 120 euros per calendar year, which works out to only 10 euros a month^[3]. This low entry hurdle ensures that even with a low income or part-time employment, you can make full use of the state allowances without straining your monthly budget.

This leverage arises from combining your small own share with the high allowances. While the state Grundzulage is calculated as a percentage match on your own payments, the Kinderzulage flows directly into your account at a 1:1 ratio^[3]. For every euro you pay in yourself, the state adds one euro for every eligible child, up to a maximum of 300 euros per child per year^[3]. An Altersvorsorgedepot is thus worthwhile for families already with a small contribution.

With a monthly outlay of just 10 euros, you already activate the state support and lay the foundation for your long-term wealth-building. Because the Altersvorsorgedepot is a high-return, ETF-based product, these allowances also benefit from the compound-interest effect over the decades. Whether the Altersvorsorgedepot is worthwhile for you as a low earner with several children, or how you can optimise your payments, can be precisely calculated. Feel free to use the subsidy calculator on our portal for this, or get personal, neutral support via the independent advice service. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Example calculation 1: single parent with one child and a low income

For single parents on a tight budget, the new Altersvorsorgedepot offers an exceptionally high financial lever from 2027. Thanks to the state-guaranteed allowance structure, you can build up a substantial savings balance with extremely little of your own money. That's because the statutory minimum contribution of just 120 euros a year is enough to secure entitlement to the proportional Grundzulage and the direct Kinderzulage^[1]. Especially for low earners, this system is a highly efficient way to invest in the capital markets without a heavy ongoing burden.

Let's look at a concrete model calculation for a single mother with one child and a low taxable income. She decides to pay the annual minimum contribution of exactly 120 euros into her Altersvorsorgedepot. This manageable own contribution of 10 euros a month immediately triggers two state subsidies. First, she receives a proportional state Grundzulage of 60 euros, exactly 50 percent of her own contribution. Second, a Kinderzulage of a full 120 euros flows into the account, since the new law provides a direct 1:1 match for every child, capped at the level of her own contribution^[1].

From an own savings contribution of just 120 euros, 300 euros a year are thus generated to work for your future with interest. In this example calculation, the state subsidy share amounts to a considerable 60 percent of the total annual savings rate. Over the decades, this state-boosted capital has a substantial effect through the compound-interest effect, especially if the account is invested in broadly diversified ETFs. To calculate more complex family situations with several children or future income changes individually, our interactive subsidy calculator is available to you. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. The calculations shown are for demonstration purposes only and should be understood as a non-binding model calculation.

Example calculation 2: single parent with two children and a medium income

For single parents with two children and a medium income, the new Altersvorsorgedepot has an exceptional leverage effect. In single-parent households, the monthly budget is often tightly calculated, which means classic pension insurance without a state contribution is hardly an option. Under the new subsidy model from 2027, though, you can build up substantial retirement provision with just a small contribution of 50 euros a month - that is, 600 euros a year. The reason lies in combining the tiered Grundzulage with the direct link between the Kinderzulage and your own savings contributions^[3].

The mathematical breakdown of this example calculation makes clear just how strongly the state subsidises your own outlay. For your first 360 euros of own contribution, you receive a 50 percent Grundzulage (180 euros). For the remaining 240 euros of your contribution, you receive a further 25 percent (60 euros). Because you pay in a total of 600 euros, you also fully exhaust the Kinderzulage for both children, worth 300 euros each, since the subsidy is linked to your own contribution at a 1:1 ratio^[3].

In sum, you invest just 600 euros net out of your own pocket, while your Altersvorsorgedepot grows by a total of 1,440 euros. This state subsidy rate of 140 percent flows directly into the investment products you choose, such as low-cost ETFs. Over a term of several decades, this high state contribution produces an enormous compound-interest effect, without excessively straining your ongoing household budget. To work out your individual allowances and future account balance precisely, you can use the subsidy calculator. Note: these mathematical projections are for illustrating the statutory subsidy rules from 2027 only and do not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

The compound-interest effect in focus: how the state allowances multiply over the decades

Unlike the classic Riester-Rente, which was often trapped in low-return pension insurance policies by rigid gross contribution guarantees, the new Altersvorsorgedepot is based on return-oriented investment with no fixed guarantee commitments. That means both your own savings share and all the state allowances flow directly into promising equity ETFs or funds. Especially for single parents, who often have only a tightly calculated monthly budget, this change of system unleashes enormous financial leverage.

When the state supports your private pension provision with the full Kinderzulage, that money immediately becomes part of your ring-fenced special assets in the account. Over terms of 20, 30 years or more, these allowances keep working for you without interruption. Because returns in the Altersvorsorgedepot are reinvested tax-free, the compound-interest effect means the state-provided starting capital grows exponentially over the decades. The statutory basis set by the Federal Ministry of Finance ensures that this allowance subsidy is credited directly to your chosen investment product^[3]. Exactly how much the Kinderzulage comes to in detail can be worked out from the statutory subsidy rates of up to 300 euros per child. Kinderzulage under the new Altersvorsorgedepot.

A mathematical model calculation illustrates how an annual Kinderzulage of 300 euros develops over typical savings periods, assuming an average net return of 5 percent a year. These figures serve as purely illustrative examples and do not constitute investment advice within the meaning of the Banking Act (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG):

• After 10 years: the state allowances paid in over a decade, totalling 3,000 euros, grow through continuous reinvestment to a total value of over 3,700 euros.
• After 20 years: over a term of two decades, the state-funded balance already adds up to over 9,900 euros, a substantial part of which consists purely of interest and compound interest earned.
• After 30 years: after three decades, the compound-interest effect produces a balance of over 19,900 euros, generated for your pension by the state subsidy alone.

For single mothers and fathers, this growth without any own capital outlay is a decisive lever. Because your own minimum contribution in the new system can be very small compared with the size of the allowances, you acquire a substantial share of growing account assets with minimal financial effort of your own. To work out your personal subsidy situation precisely and play through different scenarios for your retirement provision, you can use the interactive subsidy calculator, which breaks down the long-term effects individually for you.

An existing Riester contract: does switching to the new Altersvorsorgedepot pay off?

For many single parents who signed a Riester contract in the past, the reform from 2027 raises the question of the most sensible strategy. The good news is that lawmakers have created fair terms for a transition. If you transfer your savings into the higher-return, ETF-based Altersvorsorgedepot, you benefit from comprehensive protection for all state allowances received so far. The subsidy money already saved thus remains fully yours.

A decisive advantage of this step is the strictly capped statutory switching fees. If you want to transfer your balance, the costs are clearly capped, so bureaucratic hurdles don't stop you from moving to a higher-return investment. For precise long-term planning, it's also advisable to work out mathematically the optimal time to switch, to make the best possible use of the compound-interest effect.

• Fee cap: for a contract term of under five years, the transferring provider may charge a maximum fee of 150 euros for the transfer.
• No cost: if the term of your existing Riester contract is already over five years, the provider must allow the switch completely free of charge.
• Grandfathering: all old allowances, including the valuable Kinderzulagen, are transferred into the new Altersvorsorgedepot without any loss.
• Return potential: by dispensing with expensive contribution guarantees, the capital can flow directly into broadly diversified ETFs, allowing significantly higher return prospects in the long term.

Whether such a switch pays off ultimately depends on your remaining term and the terms of your old contract. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. We support you on our portal with neutral calculations and guide you systematically through all the options, so you can make the best financial decision for yourself and your family.

The path to your retirement provision: decide for yourself, or get independent advice?

For single parents, time is just as scarce a resource as the monthly budget. That makes it all the more important to make optimal use of the state subsidy under the new Altersvorsorgedepot from 2027, without detours. Because the allowances cover a considerable share of the required savings rate, often even a small own contribution is enough to build up a solid savings balance through the state Kinderzulage. Once you've worked out your personal subsidy rate, the question of practical implementation arises. Vorsorgedepot-Lotse accompanies you on this final stretch, from the bare calculation to a confident decision. Two equally valid, transparent paths are open to you, each perfectly suited to your prior knowledge and your life situation.

• Path for digital self-deciders: if you want to manage your finances independently, compare the terms directly and open your account online.
• Path for personal guidance: if you want to clarify complex points of detail or transfer an existing Riester contract, get expert support.

If you prefer to handle it yourself, our provider comparison helps you quickly and easily find the right neobroker for your Altersvorsorgedepot. If, on the other hand, you're facing more complex questions, such as the advantageous switch of an existing contract when family time is tight, we connect you with qualified experts via the independent advice service. Both paths are free of charge for you and designed to give you maximum financial security. Please note: all calculations and comparisons are for information purposes and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.