What the Altersvorsorgedepot delivers on €40,000 gross

Tilman Freyenhagen

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

The Altersvorsorgedepot in 2027: the new rules at a glance

From 1 January 2027, the new Altersvorsorgedepot (AVD) replaces the classic Riester-Rente (Germany's existing subsidised private pension) and fundamentally reshapes state-subsidised private pension saving in Germany^[1]. For you as a single earner on an average gross income of €40,000, this system above all means higher return potential, thanks to the removal of rigid contribution guarantees. Unlike traditional Riester contracts, providers under the new scheme are no longer required to guarantee the full amount of contributions paid in. Your monthly contributions can therefore be invested 100 percent in high-return ETFs, without expensive hedging mechanisms eating into long-term performance.

The state top-up is also organised through a new, fair allowance system. Instead of complicated bureaucratic applications, the state pays a direct percentage-based allowance on your contributions. Specifically, you receive a Grundzulage (the basic state allowance) of 50 percent on the first 360 euros of your own contribution, and a further 25 percent on every euro above that, up to a limit of 1,800 euros a year. For you as a single earner, this means that with an optimally sized savings contribution, you get the maximum subsidy of 540 euros a year in total, paid directly by the state.

• A 100 percent equity allocation is possible: the removal of guarantee requirements allows a high-return investment in low-cost ETFs.
• Direct, proportional subsidy: every euro you pay in triggers state support, starting from a minimum annual contribution of just 120 euros.
• Maximum everyday flexibility: you can adjust, pause or flexibly adapt your monthly contributions at any time to fit your circumstances.

These new conditions make state-subsidised retirement saving especially attractive for employees on a middle income. Our knowledge section guides you through the reform, and this detailed worked example shows you step by step how to optimise your savings rate. Please note: all the model calculations that follow are purely illustrative of the statutory subsidy rules and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The case study: a single earner on €40,000 gross

A single employee with a gross income of €40,000 benefits, from 2027, from both a direct state allowance and tax deduction options in the new Altersvorsorgedepot. At a standard savings rate of 4 percent of gross income (1,600 euros a year), the state subsidy noticeably lowers your actual out-of-pocket cost, which speeds up long-term wealth building (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

The calculation of the state subsidy is based on the new statutory formula, which provides for a percentage-based Grundzulage. For an annual savings contribution of 1,600 euros, this gives the following clear picture of your net savings potential:

• Total annual contribution (4% of gross salary): 1,600 euros
• State allowance: 490 euros (50% on the first 360 euros plus 25% on the remaining 1,240 euros)
• Net own contribution: 1,110 euros a year (about 92.50 euros a month)
• Total savings volume in the account: the full 1,600 euros working for you in the capital markets

Because contributions can also be claimed as special expenses, the tax office automatically runs what is known as the Günstigerprüfung (favourability check) in the background^[1]. On a gross income of €40,000 in tax class I, your personal marginal tax rate is around 30 percent. The resulting tax saving works out at about 480 euros. Unless the tax benefit clearly exceeds the allowance you received, you keep the more advantageous direct allowance of 490 euros.

With the Altersvorsorgedepot subsidy calculator, you can work through your individual income profile and various scenarios in detail, and work out exactly how to make full use of your maximum subsidy.

The state subsidy: how your allowances are calculated

The new Altersvorsorgedepot represents a fundamental change of system. Unlike the old Riester-Rente, your own contributions are subsidised proportionally, and therefore completely transparently, from 2027 onward. Every euro you pay in directly triggers a state contribution, which gives single employees on an average income reliable, easy planning. To secure the maximum subsidy for your private pension, you no longer need to fear complicated calculations.

Step-by-step calculation for a €40,000 gross income

Assuming a typical savings rate of 4 percent of gross income, your annual own contribution on a gross salary of €40,000 comes to exactly 1,600 euros. Under this new model, the state subsidy is split into two tiers. For the first 360 euros you pay into your account, you receive a state contribution of 50 percent. For every additional euro up to the statutory subsidy limit of 1,800 euros, the state adds 25 percent^[2]. On a contribution of 1,600 euros, you therefore receive substantial state support that directly boosts your return.

• First tier: for contributions up to 360 euros, you receive an allowance of 50 percent, which comes to a Grundzulage of exactly 180 euros.
• Second tier: for the further 1,240 euros of your own contribution, you receive 25 percent, adding a further 310 euros in subsidy.
• Total subsidy: on an own contribution of 1,600 euros, you therefore secure a total state allowance of 490 euros.
• Maximum Grundzulage: if you raise your annual contribution to the subsidy limit of 1,800 euros, you make full use of the maximum allowance of 540 euros.

This direct subsidy substantially increases your effective investment volume in the Altersvorsorgedepot, while your actual net cost falls noticeably. To model your personal scenario precisely and work out the exact cost effect, our neutral subsidy calculator Altersvorsorgedepot is available to you. Please note: this worked example is purely for information and does not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG). The source for the subsidy rates is the final version of the law passed by the Bundestag on 27 March 2026.^[6]

The tax advantage: how the special-expenses deduction works

Besides the state allowances, the new Altersvorsorgedepot offers substantial tax advantages from 2027. Savers can claim their own contributions plus the allowances received as special expenses for tax purposes up to 1,800 euros a year, which directly reduces their taxable income^[3]. As part of the annual tax return, the tax office automatically runs what is known as the Günstigerprüfung^[4]. This compares whether the tax deduction for special expenses is more advantageous for you than the allowance credited directly to your account. If the tax benefit is higher, the difference is paid out to you straightforwardly as a tax refund.

Worked example for a €40,000 gross income

This effect is clear for a single earner with an average gross annual income of €40,000. If you pay an annual own contribution of 4 percent of gross income, that comes to a savings rate of 1,600 euros a year. In this income bracket, your personal marginal tax rate is around 26 to 28 percent. The special-expenses deduction reduces your taxable income, resulting in a direct annual tax saving of around 430 euros. That means: while the full 1,600 euros stays invested in the account, your real net cost is only about 1,170 euros. Please note: these calculations are illustrative and for orientation only. They do not constitute tax or investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

To simulate the exact effects on your personal savings rate and subsidy, our in-house subsidy calculator Altersvorsorgedepot is available to you free of charge. With this tool, you can work out in moments how much you should pay in for the maximum subsidy.

ETF investing without a guarantee: why returns can now rise

The 2027 pension reform brings a fundamental paradigm shift for savers. Previous Riester contracts required providers to guarantee 100 percent, or at least 80 percent, of contributions paid in. That safety requirement forced insurers to put most of your capital into extremely low-yielding government bonds. When you look at the potential return on the Altersvorsorgedepot, the decisive advantage lies in the removal of these contribution guarantees. You can let your savings flow, without artificial brakes, entirely into high-return ETFs.

The historical return advantage and broad risk diversification

In practice, a long-term equity investment pays off substantially. Someone who invested monthly, via a savings plan, in the global MSCI World equity index over 20 years achieved a historical average annual return of 8.6 percent^[5]. By comparison, traditional pension insurance policies often offered only a minimal guaranteed interest rate, most recently under one percent. For a single employee on an average gross income of €40,000, where every euro of savings contribution has to work efficiently, this difference adds up to tens of thousands of euros in final capital over the decades. A globally diversified index cushions single-stock risk effectively by spreading investment across more than 1,300 companies.

• A return-oriented equity allocation: moving away from contribution guarantees lets you put 100 percent of your capital into equity ETFs, instead of tying up returns in low-interest safety assets.
• Broad diversification: global indices spread your risk across a wide range of economies and sectors, securing long-term stability.
• The compound-interest lever: the tax relief during the contribution phase leaves more net capital in the account, which can grow exponentially over time.

Giving up guarantees does mean short-term price swings, but historically these risks smooth out completely over an investment horizon of more than 15 years^[5]. To work out your personal potential transparently, you can use digital tools such as the subsidy calculator Altersvorsorgedepot. Please note: all the model calculations are for illustration only and are no guarantee of future performance. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Switch or stay? The decision facing Riester savers

If you already hold a Riester contract, the launch of the new Altersvorsorgedepot in 2027 puts you at a key decision point. You do not have to simply carry on with your existing private pension unchanged. The Federal Ministry of Finance (BMF) has set out clear statutory rules for existing contracts that give you flexibility. Adjusting your arrangement can be worthwhile especially for single employees on a gross income of €40,000, since the rigid contribution guarantee of old Riester contracts often reduces return potential.

• Contribution waiver (Beitragsfreistellung): you can leave your Riester contract dormant and stop paying in further contributions. The capital already saved stays invested until retirement, and the allowances you have already received are kept. New savings contributions then flow directly into the more profitable Altersvorsorgedepot.
• Subsidy-neutral transfer (förderunschädlicher Übertrag): the law lets you transfer your entire accumulated Riester balance directly into the new Altersvorsorgedepot, without any tax disadvantage or obligation to repay the state allowances. Your capital then keeps working straight away in the new, lower-cost system.
• Continuing the contract: you keep paying into the old contract unchanged. This usually only makes sense if you are close to retirement, or if the contribution guarantee matters more to you than the return potential of an ETF portfolio.

Which path is financially most advantageous for you depends heavily on your individual contract terms and the remaining term. For an informed switch from Riester, our digital subsidy calculator Altersvorsorgedepot is available to you. With this tool, you can use your own data and your current contract balance to calculate the long-term cost and return effect precisely. Please note: all calculations and comparisons are illustrative and for your orientation only (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

Do-it-yourself or advice: which path suits you

Private pension provision faces a fundamental realignment from 1 January 2027. With the reformed system, the Federal Ministry of Finance creates a more flexible, higher-return pension option that, for the first time, can do without the previous guarantee requirement^[1]. But knowledge alone is not enough to actually close your own pension gap. What matters for your long-term success is moving from pure information to concrete action. As your guide, we support you on this path and offer two equally valid, transparent approaches, tailored entirely to your personal preferences and prior knowledge:

• The self-directed digital path: if you already manage your finances independently and are looking specifically for cost-efficient offers, this path is ideal for you. Our provider comparison tool gives you a neutral, qualitative overview of the market for the various neobrokers and account providers for the new Altersvorsorgedepot. You can compare the applicable fee structures easily and then open the account directly online. To calculate the state allowances precisely in advance, simply use our subsidy calculator Altersvorsorgedepot.
• Personal advice on equal terms: not everyone wants to make far-reaching financial decisions about retirement on their own, especially when it comes to their personal pension gap. If you would like support, or want to clarify your individual tax situation in detail, our independent advice service is happy to help. We connect you with qualified, impartial financial advisers who carry out a comprehensive analysis of your current pension provision and support you personally in making your decision.

Both paths are available to you completely free of charge and without hidden barriers, to support you as well as possible in your decision. Please note, however, for legal reasons: the information we provide, and all calculation models, serve purely for general orientation and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Conclusion and outlook: how to prepare best for 2027

The new Altersvorsorgedepot represents a genuine milestone for private pension provision in Germany^[1]. For single employees on an average gross income of €40,000, the reformed system offers, from January 2027, a high-return alternative to the classic ETF savings plan. By removing rigid contribution guarantees and introducing a direct state subsidy, you can substantially accelerate long-term wealth building.

Your concrete action steps before the launch

• Get informed and plan: analyse your current savings rate and check how much of your own contribution you want to put in for the subsidy.
• Use worked examples: use our interactive subsidy calculator Altersvorsorgedepot to simulate your personal tax saving and subsidy rate transparently, based on your income.
• Make your decision: once the scheme launches, choose the path that suits you. You can manage the investment yourself through a low-cost neobroker, or rely on personal advice for complex questions.

The best protection against decision paralysis before the 2027 launch is early preparation. Use the knowledge section to stay up to date on the latest statutory BMF guidelines, tax adjustments and deadlines. As soon as the first tariffs appear on the market, our provider comparison helps you analyse providers' fee structures and portfolios neutrally. For anyone who prefers personal, human support in their decision, our independent advice service is also available to connect you with certified experts.

Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. All the mathematical model calculations and tax scenarios serve purely for general illustration and orientation.