When is an ETF savings plan better than the Altersvorsorgedepot?

Tilman Freyenhagen

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

When flexibility beats the state subsidy

An unsubsidised ETF savings plan beats the state-subsidised Altersvorsorgedepot whenever you need maximum flexibility. The capital stays available at all times, is not tied up until statutory retirement age, and early access triggers no tax penalties or repayment of state allowances. Anyone with little or no entitlement to state support, anyone pursuing shorter-term savings goals, or anyone who wants to control the later payout phase entirely themselves is usually better off with a free ETF savings plan^[1]. While the subsidised Altersvorsorgedepot from 2027 is geared primarily towards the long-term goal of retirement, the conventional savings plan puts absolute financial self-determination first.

The premise of the free ETF savings plan rests on pure self-reliance. You knowingly forgo state allowances of up to 540 euros a year, but in exchange you escape the strict statutory conditions of the Altersvorsorgedepot^[2]. Anyone who needs access to their money before age 65, say to finance a property purchase or take a career break, faces a detrimental use in the Altersvorsorgedepot that forfeits all subsidies. A free account with a neobroker, by contrast, allows units to be sold at any time at no cost. For self-directed savers who want to structure their finances without state-imposed constraints, this independence is a decisive criterion. Use the knowledge section to compare the detailed legal rules.

To make an informed choice between state subsidy and free flexibility, you should calculate the financial impact for your own situation. The subsidy calculator helps you work out the possible subsidy amount and the expected final capital precisely. If it turns out that your personal subsidy entitlement is low, the advantages of a free ETF savings plan usually clearly outweigh it. All calculations on our platform are for guidance and mathematically sound, but do not constitute investment advice within the meaning of section 1(1a) no. 1a KWG. Ultimately, your personal life plans and your need for security determine which path is right for you.

The risk of a detrimental use that voids the subsidy

The state subsidy for the new Altersvorsorgedepot is tied to strict statutory conditions. If you withdraw or repurpose the accumulated capital before reaching the statutory age limit - generally age 65 - this counts as a so-called detrimental use^[3]. This has serious financial consequences that can turn the subsidised account into a cost trap after the fact, if unexpected life events force you into early termination.

In the event of such a detrimental use, the state reclaims all allowances granted and all tax relief received, in full and retroactively^[4]. You must also pay full income tax on the returns earned in the account, which retroactively cancels out the tax-driven compounding effect of the accumulation phase. For self-directed savers who value maximum flexibility and financial independence, a free ETF savings plan is therefore often the superior choice. It guarantees unrestricted access to capital with no bureaucratic hurdles or financial claw-backs.

Before you commit long term to a state-subsidised product, you should check precisely how large your individual subsidy entitlement actually is. With our source-based subsidy calculator you can calculate your state subsidy precisely and set it transparently against the flexibility of an unsubsidised ETF savings plan. You will also find detailed guides on the reform in our knowledge section.

Note: The scenarios and tax comparisons shown are for illustration only. Not investment advice within the meaning of § 1(1a) no. 1a KWG.

Availability before age 65: capital with no lock-up period

Long-term retirement provision comes down to two fundamentally different philosophies: state-subsidised security versus personal financial freedom. A free ETF savings plan gives you unrestricted flexibility that the new Altersvorsorgedepot cannot offer by design. While the subsidised account is designed primarily to tie up capital until retirement begins, your money in classic securities saving through a neobroker remains freely available in every life situation.

When instant liquidity outweighs the state subsidy

To keep the tax benefits and allowances, the Altersvorsorgedepot demands strict discipline: a withdrawal before completing age 65 counts as a detrimental use that voids the subsidy. In that case, all tax benefits and state allowances received must be repaid to the tax authorities, which significantly reduces returns after the fact^[5]. For self-directed savers who value flexibility, the free ETF savings plan is therefore often the better choice. Whether for a down payment on a property, financing self-employment, or in the event of inheritance, your capital at the neobroker is subject to no lock-up periods and can be withdrawn under normal tax rules or passed on to heirs with no bureaucratic hurdles.

To weigh up whether the state subsidy can offset the drawbacks of the lock-up period in your personal situation, a precise comparison is worthwhile. Use the subsidy calculator for this, or find out more in the knowledge section. Please note that these scenarios are illustrative examples and do not constitute investment advice within the meaning of § 1(1a) no. 1a KWG.

No subsidy entitlement: when the allowances would not apply anyway

A state-subsidised Altersvorsorgedepot is not the mathematically best route for every saver. While families with children benefit from substantial allowances, the financial advantage shrinks considerably for high earners without children. The state basic allowance is capped at 540 euros a year and is tied to a strict own contribution, which is itself capped at a contribution of 1,800 euros. Anyone who wants to invest larger amounts monthly quickly runs into the statutory limits of the subsidised variant. An unsubsidised, flexible ETF savings plan, by contrast, lets you invest unlimited capital and liquidate it at any time with no tax penalties and no detrimental use.

When the free ETF savings plan dominates mathematically

If you are aiming for monthly savings rates well above the subsidy limit, the state allowance loses relative weight. Under the reform, the subsidised annual contribution is capped at a maximum of 6,840 euros, while the allowance itself remains capped at 1,800 euros^[3]. For high-earning, self-directed savers who want to invest large sums, the state contribution is diluted by the later deferred taxation in the payout phase. With the source-based subsidy calculator you can compare different savings routes neutrally for your personal situation. Without state subsidy, there is also no risk of a so-called detrimental use if you want to access your capital before age 65.

Note: The scenarios shown are for general guidance and do not constitute investment advice within the meaning of § 1(1a) no. 1a KWG.

Tax advantages in retirement: capital gains tax vs. income tax

Taxation is the decisive factor in the net return on your investment. While a free ETF savings plan is subject to capital gains tax, the subsidised Altersvorsorgedepot applies the principle of deferred taxation. That means all profits and dividends in the account remain tax-free throughout the accumulation phase, so no tax deduction reduces your return^[3]. Only in retirement do you pay tax on withdrawals, at your personal income tax rate. If, as a self-directed saver, you have a lower tax rate in old age than during your working life, this tax deferral can work in your favour.

The tax advantage of the free ETF savings plan

The free ETF savings plan, by contrast, has an entirely different tax structure. Capital gains from equity ETFs benefit here from a 30 percent partial exemption. Only the remaining 70 percent of returns is subject to the 25 percent capital gains tax, plus solidarity surcharge and, where applicable, church tax. This results in an effective tax rate of around 18.46 percent at fund level. If your personal income tax rate in old age is above this figure, the free ETF savings plan can be more attractive for tax purposes. This applies especially if you want to control withdrawals flexibly and independently, without being tied to fixed payout plans.

In summary, the Altersvorsorgedepot scores through tax-free growth in the accumulation phase, but the deferred full taxation in old age is a significant cost factor. A precise comparison with the subsidy calculator shows you how the different tax models affect your individual final capital. Not investment advice within the meaning of § 1(1a) no. 1a KWG.

Cost structure: neobroker terms vs. the 1 percent cap

The enacted law for the new Altersvorsorgedepot provides for the certified standard product to have a cost cap of a maximum of 1 percent in effective costs per year^[6]. While this limit marks a clear step forward compared with classic, often opaque private pension insurance, it remains a noticeable drag on returns over decades for cost-conscious investors. Anyone taking their private retirement provision into their own hands, rationally, will inevitably compare this statutory ceiling with the real terms offered by modern online brokers. With a free ETF savings plan, account fees and order costs are largely eliminated, which cuts ongoing costs to an absolute minimum.

A classic ETF savings plan with a low-cost neobroker generates barely any notable ancillary costs in practice today. Execution fees are often permanently at zero euros, and the ongoing management costs of the ETFs (the total expense ratio, or TER) for common world equity indices typically range between 0.05 and 0.20 percent a year^[6]. Compared directly with a subsidised Altersvorsorgedepot that either fully exhausts the statutory 1 percent ceiling or sits in the typical market range of 0.5 percent p.a., a free savings plan saves up to 0.8 percentage points in fees each year. Over long savings phases, this difference has an enormous leverage effect on your final capital through the compounding effect.

Because of this compounding effect, the fees saved each year add up quickly to five-figure sums over a working life of 30 or 40 years. If you as an investor have little or no entitlement to state subsidy, the annual cost saving at the neobroker can fully offset the purely arithmetical advantage of the state allowances. This applies especially to self-directed savers who receive no child allowances and who prefer full financial flexibility with no restrictive lock-up periods or tax-detrimental uses. To check, on a source-based footing, which route is financially superior for your personal situation, a detailed comparison with the subsidy calculator on the neutral platform Vorsorgedepot-Lotse can help.

Table: in which life situations the ETF savings plan wins

While the state-subsidised Altersvorsorgedepot (AVD) offers an attractive return opportunity from 2027, a free, unsubsidised ETF savings plan is the better choice in many life situations. The decisive factor is flexibility: in the Altersvorsorgedepot, an early withdrawal before completing age 65 generally counts as a detrimental use, under which allowances and tax benefits received must be repaid^[1]. If you need your capital for medium-term goals or are aiming for financial independence before retirement age, the classic ETF savings plan gives you unhindered access with no tax penalties.

For this strategic decision you should weigh up your personal investment horizon and your liquidity needs precisely. If, as a self-directed saver, you want to keep full control and the state subsidy does not significantly raise your after-tax return expectations, the free ETF savings plan wins. In our knowledge section we analyse this trade-off in detail. You can also use the subsidy calculator to simulate whether the state allowances compensate for the restriction on your financial freedom in your specific situation. Please note: comparisons are for illustration and do not constitute investment advice within the meaning of § 1(1a) no. 1a KWG.

Conclusion: combining the ETF savings plan and the Altersvorsorgedepot correctly

The choice between a free ETF savings plan and the new, state-subsidised Altersvorsorgedepot need not be a pure either-or question at all. Especially for self-directed savers, the strategic key often lies in an intelligent, complementary combination of both models. While the Altersvorsorgedepot, from its start year 2027, builds a substantial return bridge for your long-term retirement goal through state allowances and tax benefits, the unsubsidised ETF savings plan secures your day-to-day liquidity and unrestricted freedom of action. Anyone who deliberately links the respective strengths of both forms of investment builds a robust, two-part wealth foundation that is well positioned both for unforeseen life events before retirement and for the time afterwards.

• Exhaust the state subsidy: use the Altersvorsorgedepot up to the annual maximum of 1,800 euros in own contributions plus allowances, to make full use of the maximum state support. This limit is set as the subsidised maximum in the enacted reform of private retirement provision.
• Keep flexibility over the surplus: route any monthly savings rate above this state-subsidised maximum directly into a free ETF savings plan. That way, this portion of your capital stays fully liquid, free from state lock-up periods, and protected from the drawbacks of a detrimental use.
• Build a targeted investment structure: use the earmarked Altersvorsorgedepot exclusively for your core retirement provision, and the flexible savings plan for medium-term life goals, such as buying property, career changes, or as a straightforward emergency fund.

Our in-house subsidy calculator is available to help you work out your personal subsidy, the expected final capital, and the exact cost impact in detail. With this interactive, source-based calculation tool you can compare different savings scenarios for your individual path in life. If you need support structuring your retirement provision, the platform Vorsorgedepot-Lotse shows you, through the knowledge section, two equally valid decision routes: you can manage your Altersvorsorgedepot yourself through an online broker, or turn to our independent advice service to reach licensed experts who guide you personally. Not investment advice within the meaning of § 1(1a) no. 1a KWG.