Which subsidised retirement plan is best for me?

Tilman Freyenhagen

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

The state subsidy jungle: why there's no one-size-fits-all solution

Which subsidised retirement plan is best for you depends entirely on your individual life situation. While employees with an employer top-up should usually check occupational pension provision first, families and high earners benefit especially strongly from the new Altersvorsorgedepot from 2027. For self-employed people with a high tax burden, the Rürup-Rente is in turn an important option. A targeted combination of different provision routes often also turns out to be the mathematically smartest strategy.

The three-pillar model as the foundation

German retirement provision is traditionally based on a statutorily regulated three-pillar model that structures the various tax-subsidised routes. The first pillar (basic provision) includes statutory pension insurance as well as the Rürup-Rente (Basisrente, basic pension). The second pillar covers state-subsidised supplementary provision. This includes betriebliche Altersvorsorge (bAV, occupational pension provision), the classic Riester-Rente (Germany's existing subsidised private pension), and, from 1 January 2027, the new, significantly more flexible Altersvorsorgedepot^[1]. The third pillar consists of private, tax-unsubsidised forms of saving, such as ordinary securities accounts or private pension insurance. This structure makes clear that state top-ups and tax benefits are always tied to specific statutory requirements.

• Pillar 1 (basic provision): statutory pension and the Rürup-Rente for the self-employed and high earners.
• Pillar 2 (supplementary provision): occupational pension provision (bAV), the Riester-Rente, and the Altersvorsorgedepot launching in 2027.
• Pillar 3 (private provision): unsubsidised private pension insurance as well as regular ETF savings plans.

Because the tax effect and subsidy eligibility depend heavily on factors such as your employment status, your income and your family situation, there's no one-size-fits-all standard solution. What's optimal for a high-earning single person can be uneconomical for a family with several children. This is exactly where our knowledge section comes in: it puts the complex statutory rules into context for you, neutrally and based on the facts. To work out your individual subsidy precisely, you can use the subsidy calculator, which performs its calculations consistently in line with BMF requirements.

The new Altersvorsorgedepot from 2027: the high-return ETF revolution

Under the law reforming private retirement provision, the new Altersvorsorgedepot launches on 1 January 2027 as the modern, state-subsidised successor to the classic Riester-Rente. If you're looking for the best subsidised retirement plan, this opportunity-rich securities saving offers a high-return alternative going forward, focused specifically on low-cost ETF saving. Our neutral portal, Vorsorgedepot-Lotse, shows you how to make optimal use of the new state subsidy and put your private retirement provision on a solid footing.

The end of the contribution guarantee and a new subsidy logic

The decisive change compared with Riester contracts is dropping the rigid 100 percent contribution guarantee. This guarantee had, until now, forced providers to invest customer funds in low-yield government bonds, which drastically reduced long-term returns. Going forward, savers can invest the state allowances directly in opportunity-rich ETFs. The new subsidy structure provides for an annual Grundzulage (basic allowance) of up to 540 euros a year if an own contribution of 1,800 euros is paid in. This corresponds to a state top-up of up to 30 percent of your own capital, supplemented by potential Kinderzulagen (child allowances) and tax benefits^[2]. Please note: all calculations and mathematical projections are purely illustrative and do not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

Because account management runs through modern, low-cost neobrokers, a far greater share of your return stays inside your savings contract, instead of being lost to expensive distribution and administration fees. To find out whether switching from an existing Riester-Rente into the new account is financially worthwhile for your personal situation, you can use the subsidy calculator or get neutral information via our knowledge section. Our portal acts as your Lotse (guide) through the reform of private retirement provision and helps you make well-founded financial decisions for your pension.

The Riester-Rente in transition: keep your existing contract or switch to the account?

With the launch of the private pension reform on 1 January 2027, around ten million holders of an active Riester contract nationwide face a decision that will shape their future^[2]. Whether you should keep your existing contract or switch to a new Altersvorsorgedepot depends primarily on your remaining term and your appetite for risk: for contracts close to payout, it's usually worth securing the old guarantees, while younger savers benefit from the substantial return advantages of an ETF investment by switching. An ill-considered switch should nonetheless be avoided, since allowances already accumulated and tax effects need to be analysed carefully.

Grandfathering and the financial framework for switching

• Grandfathering for existing contracts: all contracts concluded before 1 January 2027 enjoy unrestricted grandfathering and can continue unchanged, including their existing allowance subsidy.
• Closure to new business: from 2027, no new classic Riester contracts can be concluded on the market, since the new subsidy system defines the standard for subsidised private provision.
• Cap on switching costs: to make your transition into the new product world easier, switching fees for transferring your capital are capped by law at a maximum of 150 euros, which significantly lowers the financial barrier to switching.

To shed light on this complex topic, we've built the knowledge section. Here you'll find neutral, data-based guides that help you calculate the delta between keeping and switching for your personal situation. For a precise mathematical comparison, our subsidy calculator is also available to you. Based on your existing Riester capital, your allowance history and future market performance, it works out the exact difference between the two options. In the end, you decide your own path: for digitally savvy self-directed investors, we offer the provider comparison service, while for security-minded savers, we make it easy to connect with licensed experts for a personal conversation through the independent advice service.

Please note: all calculations and comparisons on this portal are for illustration and information purposes only. They do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Occupational pension provision (bAV): the royal road for employees with an employer top-up

For many employees in Germany, betriebliche Altersvorsorge (bAV, occupational pension provision) is an essential building block of retirement planning. The main reason lies in the Betriebsrentengesetz (BetrAVG, Company Pensions Act): as soon as you pay part of your gross salary into a bAV through Entgeltumwandlung (salary sacrifice), your employer is legally required to add a top-up of at least 15 percent, provided this saves them social security contributions^[3]. This direct "employer top-up" represents an immediate return that's hard to achieve in this form with purely private, unsubsidised investments. This effective lever is further boosted by a noticeable saving on tax and social security contributions during the accumulation phase, since the contributions are deducted directly from gross salary.

Advantages and disadvantages compared directly

Although the bAV is mathematically highly attractive thanks to the state subsidy and the employer top-up, you should bear its lack of flexibility in mind. The choice of products is usually rigid, and taking the contract with you when you change employer can be complicated. Private securities saving, by contrast, offers maximum flexibility and a free choice of ETFs, but has to be funded entirely from net salary. For a well-founded decision, it's worth comparing both routes: use the subsidy calculator to examine the effects of private subsidised options, or inform yourself thoroughly via the knowledge section to find the optimal combination for your personal situation.

The Rürup-Rente (Basisrente): a tax lever for the self-employed and high earners

The Basisrente, colloquially known as the Rürup-Rente, is primarily designed for people with a high tax burden. Because the self-employed, freelancers and high-earning employees often have no access to occupational pension provision (bAV), the Rürup-Rente serves as a highly tax-subsidised alternative. In 2025, single people can claim up to 29,344 euros and jointly assessed married couples up to 58,688 euros in contributions as Sonderausgaben (special expenses), which directly reduces taxable income^[4]. Information on how this subsidy compares with other options is available in the knowledge section.

This enormous tax lever, however, contrasts with very low flexibility. By law, Rürup contracts cannot be cancelled, cannot be used as loan collateral, cannot be inherited, and can only be paid out in old age as a lifelong monthly pension. There's no option for a lump-sum payout. The coming Altersvorsorgedepot promises significantly greater flexibility here, since it allows freer ETF investment without a classic insurance framework, albeit under a different tax system.

For self-employed people and freelancers without bAV access, the Rürup-Rente remains an important basic tool for massively lowering your personal tax burden during your working life. If you value liquidity and free inheritability, though, you should take a close look at the new Altersvorsorgedepot from 2027 as a highly flexible supplement or alternative. Our subsidy calculator offers you a transparent model for your personal situation, so you can set both subsidy routes mathematically side by side.

Please note: the tax information and comparisons are for general information and do not constitute tax or financial advice. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Private pension insurance: flexibility and tax benefits in old age

Unlike state-regulated models such as the Altersvorsorgedepot, unsubsidised private pension insurance offers no direct allowances or immediate tax deductions during the accumulation phase. In exchange, it gives savers the greatest possible flexibility in the later payout. While state forms of provision are subject to strict payout rules, with private pension insurance you can freely choose whether to draw your accumulated capital as a lifelong pension or as a lump sum. As our knowledge section shows, tax optimisation at payout takes centre stage here.

The key tax argument for private pension insurance compared with an unsubsidised securities account is the so-called Halbeinkünfteverfahren (half-income method) under the statutory 12/62 rule. If the contract has a minimum term of twelve years and payout doesn't happen until after you turn 62, only half of the gains achieved are taxed at your personal income tax rate on a one-off capital payout^[5]. The usual 25 percent Abgeltungsteuer doesn't apply at all to this tax-free portion, which can be a substantial advantage, especially for high earners with a high tax rate in old age.

When looking at the overall picture, though, the effective costs of conventional pension insurance policies also need to be taken into account. Classic insurance products often carry significantly higher administration and set-up fees than modern ETF accounts, which can eat into the tax benefits of the half-income method. Use the subsidy calculator to set the projected final capital sums neutrally side by side, including the subsidy effect and the resulting cost structures. These worked examples are for illustration and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The interactive decision tree: 4 questions to the right retirement plan

Choosing the optimal state-subsidised retirement plan often feels like a maze. To give you source-based, reliable orientation, we've developed a structured path. With the private pension reform, the federal government has opened up new routes, in particular through the high-return Altersvorsorgedepot without a contribution guarantee, launching in 2027^[2]. This guide helps you systematically analyse your personal starting position and set the right course.

The four key questions for your retirement strategy

The first fork in the road always comes down to your employment status. While employees should primarily check occupational pension provision (bAV) with its compulsory employer top-up, the reform, from 2027, also opens up new subsidised options for Germany's several million self-employed people. When weighing security guarantees against equity returns, a clear paradigm shift emerges: the new Altersvorsorgedepot drops rigid guarantees to allow a higher long-term return through ETFs. For security-minded savers, though, guarantee-based insurance products remain available as an alternative.

In practice, combining different subsidy routes is often the most efficient everyday approach. You could, for example, use the bAV for basic protection and the Altersvorsorgedepot for high-return supplementary provision. To calculate the precise cost effect and state subsidy for your situation, our neutral subsidy calculator is available to you. For more complex situations, it's also advisable to seek additional personal advice, to fine-tune your individual retirement mix precisely. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Decide for yourself or get advice: the dual path to optimal provision

Choosing the right state-subsidised retirement plan doesn't have to be an either-or question. The Deutsches Institut für Altersvorsorge (DIA) finds, in its behavioural-economics research, that while broad awareness of pension gaps exists, the shift from mere knowledge to concrete action often fails due to emotional barriers or high complexity^[6]. To close this gap, our portal, Vorsorgedepot-Lotse, takes a dual approach. We seamlessly combine digital, self-directed analysis tools with the offer of personal guidance from qualified experts.

For savers who prefer to take the initiative themselves, the do-it-yourself (DIY) approach offers maximum flexibility and cost control. If you want to implement your investment strategy independently through low-cost neobrokers, you can turn to the knowledge section to build a well-founded theoretical basis. In addition, the subsidy calculator lets you precisely simulate individual savings and subsidy scenarios mathematically. Once the right strategy is clear, our provider comparison makes it easier to select the optimal account provider for the Altersvorsorgedepot from 2027 in a targeted way.

With more complex questions, irregular income as with the self-employed, or a desire for holistic protection, the pure self-directed route reaches its limits, though. In such scenarios, the independent advice service proves an indispensable link. It connects you directly with licensed advisers who analyse your individual tax and family situation and put together a tailored overall plan. Combining both worlds ensures you're well informed while also being protected from costly mistakes.

The comparisons shown are for general orientation. They do not constitute financial or investment advice within the meaning of the Kreditwesengesetz (Banking Act, KWG) (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).