Keep or switch Riester: what works for whom?

Tilman Freyenhagen

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

Riester-Rente before the shake-up: why this matters now

Whether you should keep your Riester-Rente or switch to the new Altersvorsorgedepot depends primarily on your personal profile. Younger savers with a long remaining term and expensive old contracts usually benefit from switching, while people close to retirement and security-focused investors are often better off staying in their existing contract. There's no one-size-fits-all answer, which is why a structured analysis of your own contract terms is essential.

The German retirement-provision market stands at a historic turning point. As the reform's 2027 start date approaches, classic Riester contracts are visibly losing their appeal, while the new Altersvorsorgedepot is moving into focus as a higher-return alternative. Official figures on savers' fading confidence also point to an urgent need for action: according to the German Insurance Association (Gesamtverband der Deutschen Versicherungswirtschaft, GDV), the number of Riester contracts fell below 15 million for the first time at the end of 2024, to around 14.97 million, while new business, at just around 30,700 contracts a year, has almost ground to a halt.

• The official start of the reform in 2027: from this point, the Altersvorsorgedepot is introduced as a state-subsidised, equity-based option with no strict contribution guarantees.
• The fading appeal of classic contracts: high ongoing costs and the persistently low interest-rate environment significantly reduce the real return on existing Riester policies.
• The transition to the new Altersvorsorgedepot: switching lets you transfer your existing capital without tax disadvantages and invest more flexibly in low-cost ETFs.

To avoid rushed decisions during this period of change, you should weigh the pros and cons carefully. In our Altersvorsorgedepot guides, we set out all the relevant background and the legal framework neutrally. As a first point of orientation on whether a transfer could pay off for you, note that switching costs are capped by law at a maximum of 150 euros.

The new Altersvorsorgedepot from 2027: what fundamentally changes?

On 1 January 2027, the Federal Ministry of Finance (BMF) is launching a fundamental reform of private retirement provision in Germany. The new Altersvorsorgedepot is being introduced as the state-subsidised standard to replace the previous Riester system, which was often criticised as inflexible. This change of system is meant to let you link state subsidies directly to higher-return capital-market investments. The aim is to make private provision more efficient and more attractive. In our knowledge section, we guide you step by step through these changes and help you analyse neutrally what they mean for your personal retirement provision.

The reform's three pillars at a glance

• Return focus instead of rigid guarantees: classic Riester contracts were legally required to offer a hundred-percent contribution guarantee. As a result, providers had to invest most of the capital in low-risk but low-yield fixed-income securities. With this guarantee dropped for the Altersvorsorgedepot, you can in future invest your capital entirely in higher-return assets such as equity ETFs.
• Simplified state allowances: the subsidy structure is being made more transparent. For every euro you pay in yourself, you receive an allowance of 50 cents on the first 360 euros of your own contribution, plus 25 cents for every further euro, up to a total allowance of a maximum of 540 euros a year. On top of this comes a simplified Kinderzulage (the child allowance) of up to 300 euros per child.
• Cost savings through account-based models: traditional Riester policies are often burdened with high set-up and administration costs that eat into the returns achieved. Because the new Altersvorsorgedepot can be run directly through low-cost neobrokers or account providers, product costs fall drastically, so a larger share of your contributions works toward building your wealth.

This three-part combination of higher expected returns, an optimised state allowance structure, and significant savings on product fees is meant to modernise private pension provision. Whether switching from an existing Riester contract to the new Altersvorsorgedepot is worthwhile for you personally depends largely on your remaining working life and the specific terms of your old contract. A structured comparison forms the foundation for your financial decision.

The decision matrix: keep versus switch at a glance

Whether you should keep your Riester contract or switch to the new Altersvorsorgedepot can be pinned down using clear criteria such as age, remaining term, and contract costs^[2]. Younger savers with a long remaining term and expensive old contracts are usually the ones who benefit most from switching, while people close to retirement often benefit from the old guarantee terms. Our knowledge section offers a first point of orientation, presenting the statutory rules neutrally.

Profile 1: young savers with an expensive old contract

For younger Riester savers with a remaining term of 15 years or more, transferring the capital into an Altersvorsorgedepot is especially worthwhile. The historical returns on equity investments clearly outperform classic, guarantee-laden Riester pension policies. Even if your current provider charges a switching fee, it's capped by law. Over the long term, switching saves substantial account fees and makes the most of the compounding effect.

Profile 2: savers close to retirement with secured guarantees

If you have less than five to ten years left until retirement, you should usually keep your Riester contract. Over short terms, equity-market fluctuations in the Altersvorsorgedepot can no longer be smoothed out. On top of that, old contracts carry the statutory guarantee that, at the start of retirement, at least all contributions and allowances paid in must still be available^[3]. Giving up this safety net shortly before retirement is mathematically rarely advantageous.

Profile 3: families with a strong focus on allowances

Families who benefit especially from high Kinderzulage payments are in a special situation. The new Altersvorsorgedepot keeps the state subsidy in place but offers more flexible investment options. Before switching, you should examine your existing capital carefully. To calculate your individual switch-versus-stay delta precisely, it's worth using digital tools such as the subsidy calculator.

Disclaimer: the profiles presented here serve general orientation purposes only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

When does keeping it pay off? Good reasons to stay with Riester

An existing Riester contract should never be given up without careful thought, because keeping it is, in many situations, the financially safer and more profitable option. For savers close to retirement and security-focused investors in particular, the old contract offers concrete advantages that would be lost in a switch^[4]. Anyone with only a few years left until retirement benefits greatly from the statutory contribution guarantee. Over a short remaining term, there simply isn't enough time left to offset potential equity-market swings, which is why preserving the capital paid in and the state allowances takes top priority.

Paid-off costs and grandfathering as a return lever

An often underestimated factor is the set-up and distribution costs that, for Riester contracts, were typically spread over the first five years of the term under so-called Zillmerung and fully paid off during that time. If you continue your old contract, your savings contribution now flows almost entirely into building wealth, whereas switching providers can often trigger new switching fees. These switching costs are capped by law at a maximum of 150 euros, but over a short remaining term they still further reduce the return you have left. Grandfathering also often secures attractive terms from older policies, such as a high guaranteed technical interest rate or favourable annuity conversion factors^[4].

• Short remaining term: with a remaining savings period of under ten years, the full contribution guarantee is an important protection against short-term price losses.
• Paid-off contract costs: because the set-up fees were already paid off in the first few years, your capital in the old contract now works highly cost-efficiently.
• Favourable guarantee values: older contracts often secure you high guaranteed interest rates or excellent annuity conversion factors that are no longer available on the market today.
• Included extra benefits: disability or survivors' protection built into the old contract is retained without a new medical check.

Before making a hasty decision, it's worth comparing the costs and benefits carefully. In our knowledge section, we provide detailed guides that explore these criteria in depth. For a precise mathematical comparison, the subsidy calculator is also available, letting you transparently simulate the long-term cost impact of switching.

When does switching make sense? The advantages of the Altersvorsorgedepot

Whether switching from the classic Riester-Rente to the new Altersvorsorgedepot from 2027 is worthwhile for you depends primarily on the financial levers the statutory reform offers. The biggest lever for Riester savers is the removal of the rigid contribution guarantee, which used to force providers to invest most of your contributions in low-yield, fixed-income securities. Without this statutory brake, you can choose a free and significantly higher equity or ETF allocation in the Altersvorsorgedepot. For younger savers with a long remaining term to retirement in particular, this flexibility means substantial potential to benefit from the long-term compounding effects of broadly diversified global capital markets^[2].

Alongside return potential, ongoing costs are the decisive lever in any potential switch. Classic Riester contracts are often burdened with high administration, set-up, and distribution fees that substantially reduce, or even fully absorb, the state subsidy over the years. Through neobrokers and account providers, the ongoing effective costs of the new account model fall drastically by comparison, since low-cost ETFs are the focus. To illustrate these long-term differences in wealth for your specific case, a look at our subsidy calculator helps. With this tool, you can precisely work out the financial delta between staying in your old contract and switching, taking your allowance history and remaining term into account.

• Substantially higher return potential without the classic guarantee brake: the free choice of equity allocation enables noticeably stronger account growth through compounding over the long term.
• A drastic reduction in ongoing costs: low-cost ETFs and low account fees minimise the effective cost burden compared with traditional Riester tariffs.
• Greater flexibility and portability: the subsidised retirement assets can be transferred flexibly and without hassle to other providers and more modern account structures.

The legislature has regulated the transition in a consumer-friendly way: a subsidised transfer of your saved capital is possible without you having to repay the allowances received. The legislature also provides that such a provider switch is free of charge after five years of contract duration, while a switching-cost cap of a maximum of 150 euros applies before that period ends. For a comprehensive overview of your options and the profile that suits you, our knowledge section offers neutral guidance and source-based analyses.

The switching process: how does the transfer actually work?

If you decide to switch from your existing Riester contract to the new Altersvorsorgedepot, the practical process is clearly regulated by the legislature. We guide you through this process as a neutral navigator, so you don't miss any deadlines or formal details. As part of the reform, the federal government has made sure this step goes smoothly for you and that the retirement assets you've painstakingly saved can be transferred without financial loss^[2]. The key principle here is full tax neutrality: transferring the capital is not, by law, treated as a tax-harmful use. In concrete terms, this means you have to repay neither the state allowances you received over the years nor your tax benefits to the state. The only basic requirement for this protection is that the entire balance is transferred directly, without interruption, from your old provider to the new, certified Altersvorsorgedepot.

The individual steps of the transfer process

1. Terminating the old contract: you give written notice terminating your existing Riester contract with your current provider for the purpose of the transfer. Be sure to observe the statutory notice period, which is usually three months to the end of a calendar quarter.
2. Opening the new account: you choose a suitable provider for your state-subsidised Altersvorsorgedepot and open the new account there, available from 2027.
3. Submitting the transfer order: you submit the transfer application directly to your new account provider. They coordinate the direct capital transfer in the background with your old Riester provider, so tax neutrality is preserved without a gap.

The legislature has also set consumer-friendly limits on the switching fees that apply. A statutory switching-cost cap protects you from excessive fees: for transferring the capital, your old provider may charge you a maximum of 150 euros before five years of contract duration have elapsed; after that, switching is entirely free of charge for you. To identify the ideal partner for your new account, our provider comparison can help. You'll find further details on the legal conditions and tax rules in the knowledge section. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The cost trap: why dormant Riester contracts are often the worst choice

Many Riester savers who are unhappy with how their contract has performed, or who want to save on their monthly contributions, choose an apparently simple way out: they make the contract contribution-free. According to research by Finanztip, this kind of dormancy already affects around 20 percent of all Riester contracts in Germany^[5]. But a dormant account is often a costly illusion. Instead of preserving the saved capital unchanged for old age, ongoing administration and account fees steadily erode the balance year after year. Because no new contributions flow in and returns stay weak, the purchasing power of the saved assets shrinks continuously. By comparison, the new Altersvorsorgedepot offers a higher-return alternative for your capital.

The three core factors behind the steady erosion

• Steady loss of purchasing power through administrative fees: even for contribution-free contracts, insurers and banks continue to deduct fixed annual administration costs. Without new contributions and state allowances, the real contract balance shrinks continuously.
• The illusion of dormant capital earning no return: many savers believe their capital sits safely parked until retirement. But because of old contracts' rigid guarantee obligation, the money often sits in extremely low-yield fixed-income investments that, after inflation, amount to a real loss.
• A decisive switch as a higher-return alternative: a contribution-free old contract locks up your capital. By decisively switching to the Altersvorsorgedepot from 2027, you can reallocate your existing balance into low-cost, broadly diversified ETFs and benefit from real market opportunities.

A dormant contract is therefore not a safe haven, but a passive source of losses. If you want to know how heavy the cost burden of your old contract is compared with a modern ETF account, our subsidy calculator can help. Through our knowledge section, we also provide source-based analyses so you can examine your switching options in detail. Switching lets you make use of the statutory fee cap on transfers and put your hard-earned savings back to work for your retirement.

Individual assessment: how to find your optimal savings path

The decision on whether to keep your Riester contract or switch to the new Altersvorsorgedepot can't be answered in a one-size-fits-all way. While the statutory reform offers new, higher-return paths for state-subsidised retirement provision from 2027, the optimal choice depends largely on your personal life plans and your individual risk tolerance^[2]. A generalised matrix can serve as a first point of orientation, but it never replaces an analysis tailored to your specific situation. Because many savers face the major challenge of precisely weighing up the capital already saved against future allowances, a systematic, criteria-based approach is essential.

For a first, data-based point of orientation, we've provided digital tools. With the subsidy calculator, you can independently and transparently calculate your existing Riester capital, your remaining contract term, and the expected cost impact of switching. This gives you a neutral, mathematical comparison between your current old contract and the long-term return potential of a modern, ETF-based account model. Please note our legal disclaimer on this: the calculations and information provided serve illustration and general information purposes only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

If you're still unsure after this first mathematical calculation, or if you'd rather have a personal, human assessment, we're happy to support you on the rest of the way. Through our independent advice service, you get the chance to clarify open questions in detail with licensed, independent financial advisers in a free initial conversation. Whatever you ultimately decide, whether self-directed investing through a neobroker or a professionally guided provision solution, our goal as your Vorsorgedepot-Lotse is to give you the security and clarity you need for a well-founded, future-proof decision.