What happens to my Riester-Vertrag when I switch to the AVD?

Tilman Freyenhagen

Published on 14 June 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

Grandfathering from 2027: your Riester balance is safe

When the reform launches in 2027, your existing Riester-Vertrag stays fully protected in legal terms. No one is forced to transfer their savings into the new Altersvorsorgedepot or give up their old contract prematurely. The Federal Ministry of Finance (BMF) has made clear that unrestricted grandfathering applies to all contracts concluded before 1 January 2027^[1]. You can therefore continue your existing contract exactly as before, or take your time getting familiar with the new, higher-return options.

Your options at a glance

Although no new Riester-Verträge can be concluded from 2027, the capital you've already saved, including all state allowances, remains securely available to you. In principle, you have a choice of three paths: leaving the old contract dormant and contribution-free, transferring the balance in a subsidy-preserving way to a new account, or cancelling the contract. Each of these options has specific financial and regulatory consequences for your contribution guarantees and your subsidy.

Which path makes the most economic sense for you depends heavily on the cost structure and guarantees of your existing contract. We help you make this decision on a transparent, data-based footing. Feel free to use our knowledge section to study detailed comparisons, or work out the long-term effects of switching directly with our subsidy calculator. If you'd rather have a tailored solution for your personal retirement planning, our independent advice service connects you free of charge with a licensed expert for a personal conversation.

Your options compared: capital, allowances and guarantees

When the switch to the new Altersvorsorgedepot takes effect from 2027, your existing Riester-Vertrag stays fully protected. You don't have to cancel your old contract prematurely — you're free to choose between several courses of action. Depending on your contract terms, remaining term and individual risk appetite, you can transfer the saved capital along with all state allowances, leave the contract dormant and contribution-free, or continue it unchanged^[2]. Allowances and tax benefits already received are kept in full if you make a subsidised transfer. The law provides that transferring the funds to a new Altersvorsorgedepot stays tax-neutral, so you needn't worry about any tax disadvantages.

Which of these paths makes the most economic sense for you depends heavily on the cost structure and guarantee obligations of your current Riester-Vertrag. While switching often pays off for very expensive contracts with low returns, leaving the contract dormant or continuing it can be advisable for contracts close to retirement. With our subsidy calculator, you can work out precisely how switching would affect your personal situation over the long term. For a comprehensive review of your existing contract, our independent advice service is also available, connecting you straightforwardly with qualified, product-neutral experts.

Option 1: keep paying into the Riester-Vertrag unchanged

Holders of an existing Riester-Vertrag are under no immediate pressure to act. Once the statutory reform takes effect, full grandfathering applies to all existing contracts^[1]. You can therefore continue your private retirement provision unchanged, under the previous terms and contractual arrangements. The state guarantees that allowances and tax benefits already received stay fully intact, as long as you continue the contract as agreed. Even after the new product landscape launches, you can keep paying your agreed contributions and have the allowances credited directly to your contract account under the old rules. You'll find detailed information on the legal background and deadlines in the knowledge section.

This option suits savers in particular who took out a classic Riester-Vertrag in the past with a high guaranteed rate of return^[3]. Contracts from earlier years often still offer fixed guaranteed rates that can no longer be found on today's market. These contracts also carry a hundred-percent contribution guarantee at the start of the pension, giving you a high degree of security. Bear in mind, though, that by continuing the old contract you stay tied to the old subsidy system. You therefore don't benefit from the potentially higher subsidy rates or the more flexible investment options of the new Altersvorsorgedepot.

• Keeps all previous contractual guarantees, including the historical guaranteed rate on the savings portion.
• Continues the state Grundzulage and, where applicable, the Kinderzulagen (child allowances), calculated under the classic method.
• No entitlement to the new, simplified subsidy rates or the flexible account structures of the reformed model.
• The one-hundred-percent contribution guarantee remains unrestricted until the payout phase.

To weigh up whether keeping your existing contract is financially more advantageous than switching, an individual calculation is worthwhile. With our subsidy calculator, you can compare the projected performance of your existing Riester-Vertrag with the higher-return options of the new model. Please note that all calculations are purely illustrative. This does not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Option 2: making the contract contribution-free (leaving it dormant)

Making a contract contribution-free is a sensible middle path for many Riester savers who no longer want to pay in their own contributions but still want to keep the returns and state allowances secured so far. If you leave your Riester-Vertrag dormant, the capital you've already saved, including all allowances and tax benefits received, stays protected in your existing contract. This does not count as a breach of the subsidy conditions, so unlike with a cancellation, you don't have to repay any subsidies to the state^[4].

There is, however, one major consequence of leaving the contract dormant: because you no longer pay in new own contributions, all future state allowances and tax-deduction options also stop from the point you make the contract contribution-free. The contract balance does still earn interest or grow, depending on the tariff, but without new payments it usually grows noticeably more slowly. In our neutral knowledge section, we explain the exact pros and cons of this option in detail.

• Keeps all allowances: The Grundzulage and Kinderzulagen credited by the state so far remain yours in full.
• Grandfathered guarantees: The contractually agreed contribution guarantee for your existing balance generally stays active.
• No new subsidies: Because you no longer make own contributions, your entitlement to future allowances lapses.
• Watch ongoing costs: Even a contribution-free Riester-Vertrag continues to incur annual administration costs, which can eat into the dormant balance.

A mathematical comparison can help you work out whether leaving the contract dormant pays off financially compared with switching to the new Altersvorsorgedepot. Our source-based subsidy calculator provides a neutral basis for calculating this, letting you compare the long-term cost effects of existing contracts. Please always bear in mind: all calculations are purely illustrative. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Option 3: subsidised transfer into the Altersvorsorgedepot

A complete switch of systems makes sense if you want to benefit from the new, flexible return opportunities without a rigid contribution guarantee. With this option, you transfer your existing Riester balance directly into the new Altersvorsorgedepot. Lawmakers provide special protection for this: the transfer is tax-neutral and does not breach the subsidy conditions in any way^[1]. That means all the state allowances and tax benefits you've received so far stay fully intact and keep working in the new account, without you needing to worry about repayment. The history of your contract is therefore not lost.

How the transfer works in practice

To carry out the switch, you request the transfer of the old contract from your new account provider. The outgoing provider is legally required to release the saved capital, though switching fees may apply. From the point of transfer, your capital is subject to the new terms of the Altersvorsorgedepot. This lets you escape the often expensive guarantee costs of the classic Riester-Rente and invest the entire balance in, for example, low-cost ETFs to benefit from the capital markets over the long term. The new provider also may not charge any set-up or distribution costs on the capital brought in, which spares you cost during the transition.

Whether this step is worthwhile for you individually depends heavily on the costs and remaining guarantee promises of your existing contract. With our subsidy calculator, you can work out precisely the potential cost advantages and the expected final capital under the new system. This gives you a well-founded, neutral basis for your private retirement planning.

The risk of cancelling: why exiting gets expensive

Exiting Riester provision early by cancelling and taking a cash payout may seem tempting at first, but in most cases it brings significant financial losses. Lawmakers classify such an early termination and payout of the capital outside the intended plan as a so-called breach of the subsidy conditions^[5]. Because the state subsidy is tied to the purpose of lifelong retirement provision, cancelling removes the legal basis for granting these subsidies retroactively for the entire term.

The consequences of this breach of the subsidy conditions are far-reaching and affect both the allowances received and the tax benefits accrued over the entire contract term. Before the remaining balance is paid out to you, the Zentrale Zulagenstelle für Altersvermögen (ZfA, the central pension allowance office) determines the repayment amounts and deducts them directly from your contract balance^[5]. If instead you aim for a subsidy-compliant transfer of your capital into the new Altersvorsorgedepot, you can keep this subsidy in full. You'll find detailed guides on this in our knowledge section.

On top of repaying the allowances, you have to pay tax on the returns and gains in value accumulated in the retirement assets. In the year of cancellation, these returns are subject to your personal income tax rate, which can result in a noticeable tax burden^[5]. To examine the financial impact for your specific situation in detail, our interactive subsidy calculator is available to you. For an individual review of your existing contracts and advice on your options, you can also use our independent advice service.

Switching costs: the maximum the transfer can cost

If you want to transfer your existing Riester-Vertrag into the new Altersvorsorgedepot, the switching costs involved are strictly capped by law. For the transfer, the outgoing provider may charge you a maximum of 150 euros during the first five years after the contract was concluded^[6]. If your existing contract has already run for at least five years, the switch is guaranteed by law to be completely free for you^[6]. This removes Riester savers' worry about excessive fees from their previous provider.

The statutory fee rules in detail

The cap on switching fees is a central pillar of the new reform law on private retirement provision. It's meant to ensure that consumers aren't kept from switching to more profitable, modern forms of investment by unreasonable barriers. The law draws a clear distinction between the period right after the contract is concluded and the long-term contract term. In the first five years after the old contract was concluded, the ceiling of at most 150 euros applies^[6]. After five years have elapsed, switching fees from the outgoing provider are dropped entirely.^[6] Please note that, as part of special promotions, some providers even cover all or part of the old provider's switching costs. You can work out precisely whether switching is worthwhile for you, despite any remaining term, with the subsidy calculator on our site.

Before any switch, a detailed review is advisable, because beyond the pure switching costs, the contribution guarantees of the Riester-Vertrag that you'd give up also need to be weighed against the return potential of the Altersvorsorgedepot. For a well-founded decision, it's worth considering personal advice as well as mathematical comparisons. Our site offers the independent advice service for this, to connect you with certified experts. Note: The calculation examples and fee rules presented in this article are for general information only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Next steps: run the numbers and get neutral advice

The enacted reform of private retirement provision from 2027 confronts existing Riester savers with a major decision^[1]. Statutory grandfathering does guarantee that existing contracts can continue unchanged, but the option of a subsidised transfer into an Altersvorsorgedepot often offers new return potential alongside reduced costs. The choice between making the contract contribution-free, continuing it, or transferring the capital in full depends on the individual contract details, the guaranteed pension factors and the remaining term.

A step-by-step approach is advisable for working out the optimal strategy in this situation. Digital analysis tools let you calculate the financial difference between the two systems precisely. Our subsidy calculator lets you enter your existing Riester capital as well as the switching costs involved, to get a transparent picture of how your capital will develop in future. This turns complex statutory rules into a concrete, mathematical basis for your decision.

Depending on your personal preference, our site offers two equally valid paths. If you'd like to manage your retirement provision yourself, the knowledge section provides all the expert material you need to take the next steps on your own. If instead you prefer personal support from qualified experts, our independent advice service connects you with licensed financial advisers who assess your existing contract and the Altersvorsorgedepot options completely neutrally.