Suspend your Riester contract or switch to the Altersvorsorgedepot?

Tilman Freyenhagen

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

The underrated third option: suspending your Riester contract

If you're facing the choice between suspending your Riester contract or switching to the Altersvorsorgedepot, suspending contributions is often the safest middle path. Instead of cancelling or paying to transfer, simply leave the money you've saved in the legacy contract and, from 2027, start saving into the new Altersvorsorgedepot with Vorsorgedepot-Lotse. That way you secure valuable guarantees and avoid costly repayments of state subsidies.

How suspending contributions works in detail

The mechanics of suspending contributions are straightforward. You simply give your provider informal notice that you want to suspend the Riester contract. That immediately removes your obligation to pay in monthly, giving you some financial breathing room. A key advantage is that you keep every benefit gained so far: the state allowances and tax relief you have earned stay untouched and, unlike with a cancellation, do not have to be repaid^[1]. The existing capital keeps working under the old contract terms, while you can invest future contributions for growth.

• All guarantees preserved: the contribution guarantee on what you have already paid in remains fully intact while the Riester contract is suspended.
• No loss of allowances: unlike with a cancellation, you don't have to repay allowances or tax benefits you have already received to the state.
• Financial flexibility: suspending payments frees up room for the state-subsidised Altersvorsorgedepot.
• Watch ongoing costs: administrative charges can still be levied against the contract even during the suspended phase.

This route gives you maximum security and flexibility. You preserve the guaranteed legacy balance while directing new savings contributions from 2027 into the higher-return Altersvorsorgedepot. Our knowledge section hosts the source-based subsidy calculator, which you can use to work out the exact financial impact for your individual case. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Guarantee protection compared: why the legacy contract often stays valuable

The key difference between the classic Riester contract and the Altersvorsorgedepot launching in 2027 lies in the structure of the contribution guarantee^[2]. Classic Riester policies guarantee you by law the preservation of 100 percent of the contributions and state allowances paid in by the time your pension starts^[3]. To underwrite that promise permanently, providers have to hold a substantial share of the capital in safe but very low-return investments. The new Altersvorsorgedepot, by contrast, does away with a mandatory full guarantee, so as to give you significantly better return prospects via the open capital market^[4]. There, savers can choose between flexible guarantee levels, such as an 80-percent guarantee, or forgoing a guarantee entirely, according to preference^[5]. We explain these structural differences in detail in our knowledge section.

For existing Riester savers, that points to an often-overlooked middle path: suspending contributions. If you suspend your legacy contract, the balance you have already saved, together with the valuable nominal guarantee, stays fully intact. No further payment falls due, and you can keep the contract running on its old terms. At the same time, you secure the chance to invest your new monthly savings flexibly and for higher returns in the Altersvorsorgedepot. Whether this split approach pays off mathematically for your personal situation can be worked out precisely. Use the subsidy calculator for this, to compare the projected final balances and make a well-founded decision for your retirement provision.

The cost structure while dormant: which fees keep running

Suspending a Riester contract is often presented as a convenient interim step for stopping payments while building up capital in parallel in the new Altersvorsorgedepot. However, suspending the contract by no means makes it free of charge. Providers are legally entitled to keep deducting ongoing administration costs from the remaining balance even after contributions are suspended^[6]. These costs erode the capital tied up in the legacy contract year after year, with no new contributions or state allowances to support the account.

The creeping erosion caused by fixed fees

Especially problematic are contractually fixed costs charged as an absolute euro amount rather than a percentage of the account value. For smaller Riester balances, this produces a mathematically drastic downward spiral: if a suspended contract with, say, 3,000 euros in it carries hypothetical fixed costs of 50 euros a year, that works out to an ongoing annual fee of more than 1.6 percent (on top of internal fund costs). Over the years, this fee burden eats away a substantial share of the capital and of earlier gains^[7]. A continuous erosion of the capital threatens before the payout phase has even begun.

To prevent this financial loss, you should analyse the remaining balance in the legacy contract closely. If the ongoing contract costs exceed the expected return on the remaining guaranteed investments, a full switch to the Altersvorsorgedepot can be the economically smarter alternative. Using unbiased analysis via our knowledge section or the interactive subsidy calculator, which also factors in switching costs and grandfathering, you can simulate the cost burden transparently to check whether suspending the contract pays off in your case or a direct transfer is advisable.

The parallel fresh start: building the Altersvorsorgedepot from 2027

If you suspend your existing Riester contract, you merely stop making further payments. Your existing capital stays in the legacy contract and continues to earn the interest and guarantees agreed there. From 1 January 2027, you can open a new Altersvorsorgedepot alongside it and start saving from scratch. This route suits savers in particular who want to protect valuable guarantees in the legacy contract while also tapping the significantly higher return potential of capital-market-based ETF saving for future contributions. This parallel fresh start also lets you sidestep any immediate switching costs.

The new state subsidy in the Altersvorsorgedepot

In the new Altersvorsorgedepot, you will benefit from 2027 from a modernised state allowance structure that is significantly more flexible than the old Riester system. The state basic allowance will in future be up to 540 euros a year^[2], with the state subsidising your own contributions at a rate of 50 percent for the first 360 euros and 25 percent for further amounts up to 1,800 euros. On top of that comes a child allowance of up to 300 euros per child, where applicable. Because the Altersvorsorgedepot does away with the strict contribution guarantee, your money can flow broadly into equity ETFs without the costs of that protection, which can lead to significantly higher returns in the long run. (Note: all calculations are illustrative. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

• Suspending the legacy contract protects existing interest guarantees and avoids costly deductions for an early transfer.
• From 2027, the state basic allowance of up to 540 euros flows directly into your new, higher-return Altersvorsorgedepot.
• Giving up the hundred-percent contribution guarantee allows unrestricted investment in low-cost ETFs.
• You keep full flexibility and can compare how both contracts perform before making a final decision.

To check how the new allowance structure affects your individual savings capital, it's worth taking a look at the official knowledge section. There you'll find deeper analysis of the reform. For a precise calculation tailored to your personal situation, you can also use our subsidy calculator. Whether you take the self-directed route or want to draw on our independent advice service is entirely up to your personal preference.

Switching costs and cancellation traps: the financial hurdles of a transfer

Anyone facing the decision of whether to dissolve or switch their old Riester contract quickly runs into significant financial hurdles. Cancelling is, in the vast majority of cases, the least profitable option: under what is known as harmful use, the state reclaims every allowance granted over the years, along with every tax reduction received^[8]. Often, only a fraction of the actual balance is left. A direct transfer of the capital into the new Altersvorsorgedepot from 2027 does protect against that repayment obligation, but it comes with switching fees at the current provider. By law, a cap of at most 150 euros applies for the first five years of the contract; after that, under the statutory rules, the switch is typically even free of charge^[8]. Even so, these fees eat into the start-up capital you worked hard to save.

This is exactly where an often-overlooked but financially highly attractive middle option for Riester savers comes in: suspending the legacy contract without cancelling it. Instead of transferring the capital hastily and risking switching fees, you simply suspend the old contract. The balance you have saved keeps working in the background, guarantees and allowances included, while your new monthly savings contributions flow fully and flexibly into the higher-return Altersvorsorgedepot. This protects your liquidity and secures full grandfathering for you. To find out whether a full transfer or suspending the contract is more lucrative for your personal pension trajectory, you can use the subsidy calculator. For deeper strategic analysis and a review of your individual contract terms, our independent advice service is also on hand to connect you with qualified experts. You'll find further reliable background reporting on this topic directly in our knowledge section. Please note our legal notice: all comparisons and cost figures are for illustrative purposes only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Direct comparison: suspending versus a full transfer

If you want to optimise your private pension provision, you'll face an important strategic decision from 2027. Alongside a full switch into the new Altersvorsorgedepot, there is an often-overlooked option: suspending contributions^[9]. You then stop paying new money into the old Riester contract and save into the new account instead. The Riester capital you have already saved stays with your existing provider and keeps working there, so your state-guaranteed entitlements remain fully protected.

Which option makes the most financial sense for you depends largely on the terms of the legacy contract and its remaining term. While a full transfer can be advantageous when ongoing costs are very high, suspending the contract protects valuable guarantees shortly before retirement. Cancelling is almost always the least profitable solution, because of the harsh repayment obligation. For a detailed comparison of your individual figures, the subsidy calculator is recommended. Additional information is available in the knowledge section. For a personal assessment, our independent advice service is also available to you. Please note: this comparison is for illustrative purposes only and does not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

Decision guide: when is suspending the best choice?

If you're facing the question of whether to transfer your existing Riester contract into the new Altersvorsorgedepot or cancel it, there's an often-overlooked option: suspending contributions. By suspending the legacy contract, the capital you have already saved stays in the existing contract while you stop paying in new contributions^[6]. Your existing balance, including the state allowances, stays secured and keeps earning interest under the contract terms, while you can invest future savings flexibly in the more profitable Altersvorsorgedepot.

• Preserving nominal guarantees: old Riester contracts guarantee you the contributions paid in by the time your pension starts. If your existing contract has a high contribution guarantee and you have a strong need for security, suspending it protects that promise.
• Avoiding switching costs: some legacy advisers or insurers charge high fees for transferring capital. If the transfer is disproportionately expensive, suspending the contract can be the more economical choice.
• A short time left until retirement: if you have only a few years left before you retire, the remaining time in the equity market of the Altersvorsorgedepot is often not enough to reliably offset the switching costs or possible market swings.

Use the subsidy calculator to compare the projected final capital values and cost structures neutrally. For deeper background knowledge, our knowledge section is also available to you. If you'd like personal support, Vorsorgedepot-Lotse connects you with an independent advice service for a tailor-made solution. Please note: not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Next steps: implementing your strategy the legally safe way

If you decide to suspend your existing Riester contract while saving into the new Altersvorsorgedepot in parallel, the administrative effort involved is pleasingly small. You don't need to cancel your legacy contract — you simply suspend it. That way, you secure the entitlements you have already earned: the state allowances you have accumulated so far and the contractually agreed contribution guarantee stay fully intact in the legacy contract, while you can direct future savings contributions flexibly and for higher returns into the new account.

1. Informal written notice: send your Riester provider an informal letter with your contract number and your own signature. In it, ask for the contributions to be suspended at the earliest possible date, and request written confirmation.
2. Revoke the direct debit mandate: in the same letter, revoke the existing direct debit mandate, to reliably stop any further automatic deductions.
3. Open your Altersvorsorgedepot: open your new, state-subsidised Altersvorsorgedepot with a provider of your choice, so you can redirect the state subsidy there directly from 2027.
4. Update your standing allowance application: file a new standing allowance application for the new account, so the allowances flow directly into your new, higher-return fund investment.

Before you carry out these administrative steps, though, it's always worth running a well-founded financial-mathematics check on your individual contracts. With our subsidy calculator, you can precisely determine and compare the exact cost impact and the expected final capital of both options. If you're unsure which strategy is optimal for your specific financial situation, our independent advice service connects you free of charge with a licensed, neutral expert for a personal analysis. Further background reporting and statutory detail are also available in our knowledge section.