Does the Altersvorsorgedepot cover the pension gap?

Tilman Freyenhagen

Published on 30 July 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

Measuring your personal pension gap in the wider system

Whether the Altersvorsorgedepot closes your personal pension gap depends largely on the interplay between your monthly savings rate, investment horizon and the size of your provision gap. Your individual gap is the difference between the retirement income you're aiming for and the payout you can expect from statutory pension insurance. In practice, many households show a remaining pension gap of several hundred euros a month, needed to maintain their accustomed standard of living in old age.

Placing the Altersvorsorgedepot within the overall system

Available from 2027, the Altersvorsorgedepot takes on the role, within this system, of a state-subsidised, capital-market-based pillar of private provision. By dropping rigid guarantee requirements, the new account allows stronger participation in return opportunities, cushioning provision gaps more efficiently than previous insurance products.

• Determining your target net income: setting the monthly amount you'll need in retirement (rule of thumb: roughly 80 percent of your last net earnings).
• Establishing your statutory pension: subtracting the expected net pension shown on your official pension statement.
• Calculating the AVD contribution margin: comparing the expected capital from the Altersvorsorgedepot, including the state subsidy allowances.

If you start saving early, you can often cover a moderate provision gap through the Altersvorsorgedepot alone. With shorter remaining terms or bigger gaps, the account serves as a central building block that should be combined with other forms of provision. (Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Maximum AVD subsidy and capital build-up at a glance

From 1 January 2027, the state subsidy structure for the Altersvorsorgedepot (AVD) rests on two central pillars: direct state allowances and effective tax relief. Under the adopted pension reform, a Grundzulage (basic allowance) of up to 540 euros^[1] a year is granted, provided a subsidised own contribution of at least 1,800 euros^[1] is paid in annually. Beyond this subsidised base, payments of up to a maximum contribution of 6,840 euros^[1] a year are possible. While the own contribution up to 1,800 euros is directly subsidised and deductible as a Sonderausgabe (special expense), the amount above that grows unsubsidised but tax-free in the account.

• Maximum Grundzulage: with an annual own contribution of 1,800 euros (150 euros a month), the full state Grundzulage amounts to 540 euros a year.
• Allowance logic: the state subsidises the first 360 euros of your own contribution at a rate of 50 percent (180 euros), and every further euro up to 1,800 euros at 25 percent.
• Statutory maximum contribution: total payments are capped at 6,840 euros a year, with amounts above 1,800 euros no longer directly subsidised but benefiting from tax-free growth in the account.
• Tax-deferral effect: all price gains, dividends and interest income are reinvested tax-free during the accumulation phase, with no deduction of Abgeltungsteuer (withholding tax on investment income).

The lever of tax-free reinvestment for closing the gap

The key mathematical lever of the subsidised Altersvorsorgedepot lies in the unimpeded dynamics of compound interest during the accumulation phase. Because ongoing returns such as dividends and realised gains are not reduced by Abgeltungsteuer (withholding tax on investment income), the entire capital stays invested in securities and generates further returns. For savers who want to offset a specifically calculated pension gap, this tax-deferral effect noticeably improves capital accumulation compared with an unsubsidised account. When finally assessing sufficiency, it must always be kept in mind that payouts in the payout phase are subject to deferred taxation. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Scenario 1: young career starters with a 30 to 40 year term

Young savers benefit especially strongly from the long compound-interest effect and the state subsidy under the new Altersvorsorgedepot. If you have an investment horizon of 30 to 40 years and use up the full subsidised annual maximum, you can usually close a typical pension gap in retirement completely. In addition, those under 25 receive a one-off Berufseinsteigerbonus (career-starter bonus) from the state.

Worked example: full subsidy over a 35-year accumulation phase

Over such a long period, the Altersvorsorgedepot can generate a significant additional monthly pension through the compound-interest effect. This can often cover an average pension gap in retirement completely and build up an extra buffer. Using our subsidy calculator, you can simulate your personal subsidy entitlements and contribution paths. (Note: not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Scenario 2: mid-career savers with a 15 to 25 year term

For mid-career savers with a remaining savings period of 15 to 25 years — for example with a late start at 45 — the compound-interest lever is noticeably weaker than for career starters. That makes the state allowance subsidy in the new Altersvorsorgedepot all the more central. With a maximum subsidised own contribution of 1,800 euros a year (150 euros monthly), the state contributes 30 percent of your own contribution through the full Grundzulage of 540 euros a year^[4].

Worked example: 20-year savings period and coverage ratio

A worked example over 20 years shows the strength of this structure. Assuming steady market performance before costs, the annual inflow of capital from own contributions and the state subsidy adds up to a solid final capital. If this capital is drawn down in retirement, it produces an additional monthly pension. Set against a typical pension gap, the Altersvorsorgedepot alone, at standard contribution levels, achieves a decent coverage ratio, but usually doesn't close the gap completely.

The result makes clear that the Altersvorsorgedepot forms a solid foundation for mid-career savers, but on its own usually doesn't close a larger pension gap completely. Bridging the remaining coverage gap requires targeted supplementary building blocks. These include unsubsidised ETF savings plans, occupational pension provision, or raising your monthly savings rate above the subsidised maximum. Using the subsidy calculator, you can work through individual scenarios precisely. Note: all calculations and return assumptions serve as illustrative model examples. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Scenario 3: late starters with under 15 years until retirement

If you start the new Altersvorsorgedepot with fewer than 15 years of working time left before retirement, you face a heavily shortened compound-interest phase. While career starters benefit from the exponential growth of the capital market over several decades, market performance over a savings period of 10 to 12 years has a more muted overall effect. In this scenario, the state-subsidised account primarily serves as a highly efficient subsidy building block, boosting your own contributions through state allowances. A pronounced pension gap of several hundred euros a month usually can't be fully covered by this alone, though.

The financial-mathematics effect over a 10-year term

As an illustration, take the example of a 52-year-old saver who pays a monthly own contribution of 150 euros (1,800 euros a year). Through the full Grundzulage, up to 540 euros a year in state subsidy flows in^[4]. At an assumed average return of 5 percent p.a., the final capital after 10 years adds up to just under 30,500 euros. Paid out monthly over a notional pension duration of 20 years, this corresponds to a gross additional monthly pension of about 160 euros. All model calculations are for illustration only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

• High return on own capital through allowances: the state top-up immediately increases the effective return on the contributions paid in and provides a solid buffer against market fluctuations.
• Limited overall capital build-up: because of the short term, the final capital remains modest, so severe coverage gaps cannot be closed by this alone.
• Synergy with other pillars: a late start requires combining the account with existing building blocks such as occupational pension provision, property assets, or unsubsidised securities savings plans.

A late start remains economically worthwhile thanks to the direct state subsidy rate. Savers using an Altersvorsorgedepot from 50 should therefore deploy the instrument as a reliable building block within a holistic retirement strategy, rather than relying on it as a stand-alone solution.

The effect of allowances for families and career starters

Additional state subsidies such as Kinderzulagen (child allowances) and the one-off Berufseinsteiger-Bonus (career-starter bonus) noticeably increase the monthly investment volume in the Altersvorsorgedepot, without your own savings contribution having to rise. Especially for families, this creates a substantial leverage effect on reducing an existing pension gap.

• Kinderzulage (child allowance): up to 300 euros per child per year flows into the Altersvorsorgedepot as a direct state benefit.
• Berufseinsteiger-Bonus (career-starter bonus): anyone who opens an Altersvorsorgedepot before their 25th birthday receives a one-off extra state top-up of 200 euros.
• Return on allowances: because the state subsidy amounts are invested directly on the capital market, they generate compound-interest returns for the final capital over the decades.

In practice, this means: if a family with two children receives 600 euros a year in Kinderzulagen on top of the Grundzulage, a total of 12,000 euros in pure additional allowances flows into the account over a 20-year term. At an assumed average return of 6 percent p.a., this state allowance portion alone grows to a final capital of around 22,000 euros. For career starters, an early start with the 200 euro bonus over a 40-year investment horizon leads to an additional capital pot of over 2,000 euros, even without any further increase in the own contribution (illustrative worked example; no guarantee. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.).

This subsidy structure shows that the Altersvorsorgedepot can close an even bigger share of the pension gap on its own in family- or career-phase-specific situations. Even so, full coverage depends on your individual target need. The Vorsorgedepot-Lotse knowledge portal helps you work out your precise subsidy entitlement transparently.

Payout phase and subsequent taxation in the sufficiency calculation

Reliably assessing whether the Altersvorsorgedepot can close your pension gap requires looking at the payout phase. A common calculation error is to equate the projected gross payout directly with the provision gap. The law provides for deferred taxation for subsidised retirement products^[7]. While all price gains and dividends are reinvested tax-free during the accumulation phase, later payouts are subject to your personal income tax rate in retirement. Because this tax rate is generally lower in old age than during your working life, due to lower overall income, a systematic tax advantage arises. Even so, the tax liability reduces the net amount that remains freely available to you each month.

• Deferred taxation: all withdrawals are taxed as other income, which reduces the effective subsidy return in the withdrawal phase by your individual tax rate.
• Inflation and loss of purchasing power: an assumed inflation rate of 2% a year reduces the real purchasing power of a nominal payout by more than 30 percent over 20 years.
• Structure of the payout phase: alongside a lifelong Leibrente (life annuity), the statutory framework also provides for time-limited drawdown plans up to age 85, which affects the size of the monthly instalments.
• Health and long-term care insurance: depending on your status in statutory or private health insurance, additional social security contributions may apply to pension payments.

This means, for your personal retirement planning: a calculated pension gap of, say, 500 euros net requires a significantly higher gross pension from the account. To determine these levers precisely, our subsidy calculator helps you compare own contributions, state allowances and your expected tax burden. In addition, the knowledge section is available to help you work through different scenarios neutrally. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Targeted combination of the AVD with other retirement building blocks

The Altersvorsorgedepot often unfolds its full effect on closing the pension gap as a central building block within a multi-layered overall concept. Because state subsidy limits and statutory maximum amounts cap the subsidised accumulation phase, allowances and tax benefits are often not enough on their own for higher incomes or bigger provision gaps. A structured combination with unsubsidised forms of investment closes remaining gaps in a targeted way and secures your long-term financial planning.

Strategies for maximising the overall return

• Making full use of the subsidy: you primarily pay into the Altersvorsorgedepot the amount that makes optimal use of the maximum state subsidy and tax benefits.
• Supplementing with unsubsidised ETF savings plans: savings rates above the subsidy limits flow into flexible, unsubsidised ETF savings plans with no contractual ties to your retirement age.
• Incorporating occupational provision: employees combine the account with betriebliche Altersversorgung (bAV, occupational pension provision), to also benefit from employer top-ups and savings on social security contributions.

Systematically identifying the need for action

To measure the precise coverage of your own provision gap, our subsidy calculator works out the projected final capital based on your income, desired own contribution and term. If the analysis reveals a remaining shortfall against your target retirement income, an increased 300-euro savings rate can be optimally split between the subsidised account and supplementary building blocks. This creates a balanced provision structure that combines state subsidy with financial flexibility.