How does the Altersvorsorgedepot work?

Tilman Freyenhagen

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

What is the new Altersvorsorgedepot, and who is it for?

The new Altersvorsorgedepot is a state-subsidised securities account for private retirement provision in Germany, introduced from 1 January 2027. It lets you invest directly in high-return ETFs and investment funds, with tax advantages and without rigid contribution guarantees, so you can close your personal pension gap on your own. The federal government enshrined this innovative model in law to make private retirement provision fundamentally more flexible than the classic Riester-Rente (Germany's existing subsidised private pension) and to bring it in line with modern capital markets^[1].

As a neutral guide, we walk you through the new legal framework. The model is aimed in particular at self-directed investors who manage their own finances and want to benefit specifically from state allowances and tax subsidies. But for people looking for structured guidance too, our Altersvorsorgedepot guides offer reliable, source-based explanations, while our subsidy calculator lets you calculate your individual benefits precisely. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The main target groups for the new model

• Self-directed investors and private individuals who want to build long-term retirement savings independently through ETFs and funds.
• Existing Riester-Rente savers who want to check whether a tax-neutral switch to the new account is worthwhile for them.
• Self-employed people and freelancers who, through the reform, gain full access to this subsidised private retirement provision for the first time from 2027.
• Families and young career starters who want to benefit from state allowances and special bonuses during the accumulation phase.

Step 1: Contributions - your own payments and the statutory limits

The new Altersvorsorgedepot launches in 2027 with a clear structure in which your own contributions form the foundation. You already secure your entitlement to the subsidy with a statutory minimum personal contribution of 120 euros a year (the base amount). However, you only receive the full Grundzulage once you pay the maximum subsidised personal contribution of 1,800 euros a year into your account yourself.^[2] This contribution directly determines the size of the allowances you receive from the state. Beyond that, the legislator lets you invest significantly higher sums with tax advantages, so you can shape your private retirement provision flexibly and with strong return potential.

The upper limits and the optimal personal contribution

The legislator has set an annual upper limit for eligible contributions to the Altersvorsorgedepot. This limit is a maximum of 6,840 euros per calendar year^[2]. Up to this amount, you benefit from full tax deferral, meaning no tax is due on your returns during the accumulation phase. If you want to work out your optimal personal contribution, our subsidy calculator helps you calculate, with mathematical precision, the optimal balance between your own savings rate and the maximum state subsidy.

For self-directed investors, this system offers a high degree of flexibility, since you can adjust your savings rate within these statutory limits at any time. You can read the exact effect of your contribution structure on your expected final capital in detail in our knowledge section. All calculations and illustrations in this guide are for illustration purposes only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Step 2: Allowances - how the state boosts your savings rate

The new Altersvorsorgedepot is distinguished by a reformed subsidy system that replaces the previous rigid allowances from 2027 and creates targeted incentives for your private retirement provision. The state rewards your own initiative with direct allowances that flow straight into your account and increase the invested volume from day one. Unlike the old Riester-Rente, the subsidy is no longer tied to a fixed minimum contribution but rewards every euro paid in on a percentage basis. As a result, self-directed investors who want to structure their investment through low-cost ETFs benefit directly from a sharply accelerated compounding effect.

State support consists of a new Grundzulage and a targeted subsidy for families^[2]. The Grundzulage is up to 540 euros a year. It consists of a subsidy rate of 50 percent on the first 360 euros of your personal contribution (a maximum of 180 euros) and a further 25 percent on contributions up to 1,800 euros. Families also receive a Kinderzulage of up to 300 euros per child, calculated via a 100-percent subsidy on the first 300 euros of the personal contribution. You can work out transparently how these state contributions specifically affect your expected final capital using our subsidy calculator.

Savers already secure entitlement to the allowances with the statutory minimum personal contribution of 120 euros a year. The full Grundzulage of 540 euros, however, is only reached at the maximum subsidised personal contribution of 1,800 euros a year.^[2] These amounts and calculations illustrate the new statutory framework from 2027. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. You can find further in-depth information on the tax details and subsidy conditions in our knowledge section.

Step 3: Investing - building wealth with ETFs and funds

The third step is where the actual wealth-building happens. Unlike the classic Riester-Rente, the new Altersvorsorgedepot from 2027 does away with the mandatory contribution guarantee, so your contributions and the state allowances can flow directly into higher-return financial products^[2]. You invest broadly across equity ETFs or investment funds to benefit from the returns of the global capital market over the long term. The absence of a rigid guarantee requirement means your return potential rises considerably, because fund providers no longer have to build in expensive hedging mechanisms that have historically eaten significantly into performance.

For self-directed investors, this model offers a high degree of flexibility, since you can put together and manage your portfolio according to your own preferences. To understand how forgoing guarantees and the effect of compounding affect your final capital over the long term, our subsidy calculator is available to you. With this digital tool, you can effortlessly compare different savings scenarios and calculate the impact of costs on your wealth. You can also find further information on fund selection and the statutory framework in our knowledge section.

Please note that an investment without a contribution guarantee carries market risk and value fluctuations. Historical experience shows, however, that broadly diversified equity investments over longer periods are one of the most effective methods of long-term wealth-building. As a point of orientation, the principle documented by the Federal Ministry of Finance (BMF) holds that forgoing guarantees, especially over long terms, mathematically leads to a higher probability of superior final capital (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

Step 4: The payout phase - flexibility and taxation in retirement

The payout phase of the Altersvorsorgedepot begins once you reach the statutory retirement age and offers you maximum flexibility as well as substantial tax benefits. At the start of retirement, you can choose between a flexible drawdown plan and a lifelong life annuity^[3]. During the accumulation period you benefit from full tax deferral; returns and allowances are only taxed, on a deferred basis, at your personal income tax rate once the payout phase begins^[2].

Payout options compared: drawdown plan vs. life annuity

This freedom of choice fundamentally distinguishes the Altersvorsorgedepot from rigid legacy systems. With the drawdown plan, your remaining capital stays invested in ETFs or funds and can continue to grow with the market^[4]. You only pay tax on the amounts withdrawn once you're in retirement, which, thanks to the usually lower tax rate in retirement compared with your working life, can mean a clear net advantage. To individually analyse the concrete effects of this deferred taxation and the allowances on your future wealth, our subsidy calculator is available on our platform. Note: the calculations are for illustration. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The tax mechanics of deferred taxation

During the accumulation phase, all dividends, interest and capital gains in the account remain completely tax-free. No annual capital gains tax (Abgeltungsteuer) is due. This tax deferral creates an enormous compounding effect, because the gross invested capital can keep working undiminished for decades. In our knowledge section you'll find in-depth articles on these rules that help you prepare optimally for the transition into retirement.

Tax deferral - why the accumulation phase stays tax-free

During the accumulation phase of the new Altersvorsorgedepot, you benefit from a complete tax exemption on all returns generated. Unlike conventional investments, no tax at all is due on dividends, interest or realised capital gains during the accumulation period^[2]. This statutory arrangement, known as tax deferral, ensures that all your capital remains in the account without annual deductions and can keep working for you. Taxation only occurs much later, during the payout phase in retirement, which secures you substantial financial benefits.

The compounding effect and the advantages over the Standarddepot (the statutory default account)

The real lever behind this tax deferral is uninterrupted compounding. With a normal, privately held securities account, capital gains tax (Abgeltungsteuer) applies every year to realised gains and distributions, and the annual advance lump-sum tax (Vorabpauschale) on ETFs also eats into your liquidity. With the Altersvorsorgedepot, however, these burdens disappear completely. As a result, every euro of returns is reinvested at a hundred percent. Over a term of several decades, this creates significant additional wealth compared with an unsubsidised savings plan. You can read about this effect in detail in our knowledge section.

Tax deferral, however, doesn't mean permanent tax exemption - it shifts the tax burden to the payout phase. This deferred taxation is advantageous for most savers, since your personal tax rate in retirement is typically much lower than during your active working life. To find out how much you personally benefit from this shift, a precise calculation is worthwhile. Use our free subsidy calculator for this, to work out your potential final capital transparently. (Important note: purely illustrative, not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Switching from Riester to the Depot - what existing savers need to know

For holders of existing Riester-Rente contracts, 2027 brings a pivotal option: you can transfer your accumulated balance in full and tax-free into the new system once the new Altersvorsorgedepot launches^[2]. This switch is subsidy-neutral, meaning you don't have to repay state allowances and tax benefits you've already received. Whether this step pays off for you personally depends heavily on your individual contract terms and your remaining term. To make an informed financial decision and calculate the financial delta between the two options, our subsidy calculator helps you with a precise comparison.

Decision criteria for switching contracts

Switching to the Altersvorsorgedepot is particularly attractive for savers with a long remaining term. Because the new account model can forgo contribution guarantees, capital can be invested in equity ETFs with significantly stronger return potential than in classic Riester policies, which often deliver poor returns. Throughout the accumulation phase you continue to benefit from full tax deferral, so any dividends or capital gains are reinvested directly without ongoing tax deductions. The switching costs for transferring the balance are strictly regulated by law and capped at a maximum of 150 euros. Such a switch, however, requires a conscious decision for or against a guaranteed final capital sum.

Before taking any hasty steps, it's advisable to make your existing Riester-Rente contract paid-up rather than cancelling it prematurely^[5]. This way, you keep all your options open until the new account providers disclose their exact rates and terms from 2027. For structured guidance and more in-depth background reporting, our Altersvorsorgedepot guides are on hand at any time as a neutral guide.

The path to a decision - self-direction or independent advice

From the launch in 2027, two equally valid and respectable paths are open to you for setting up your Altersvorsorgedepot, and you can choose between them according to your own preferences^[2]. While financially savvy self-directed investors often prefer to set up their account independently through a neobroker, other savers prefer personal guidance from licensed experts. Both approaches have specific advantages that should be matched to your personal situation and information needs.

If you opt for the self-directed path, you can compare the different account models and complete the setup yourself. Our knowledge section helps you here with detailed guides and criteria for making informed decisions. If, on the other hand, you need a professional assessment for your retirement-provision decision, personal advice is the route to a reliable solution. Through our partners, we can put you in touch, without complication, with qualified advice that fits your exact circumstances.

Whichever path you prefer, you should calculate your individual subsidy scenarios in advance. With our online tool, the subsidy calculator, you can work out with just a few details how large your state allowances will be and how the subsidised capital could develop compared with an unsubsidised ETF savings plan. Please note that calculations in the calculator are purely illustrative and do not constitute financial or investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. This mathematical basis forms the foundation for your next steps - whether that's opening your account independently or preparing for an advisory conversation.