How much return does AVD support bring?

Tilman Freyenhagen

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

The concept of subsidy return: the allowance as a direct lever

State support for the new Altersvorsorgedepot (the new state-subsidised retirement investment account) acts like a guaranteed immediate return on your own contribution. If you pay in the maximum subsidised own contribution of 1,800 euros a year, you receive an annual state Grundzulage of up to 540 euros^[1]. This corresponds to an arithmetic subsidy return of 30 percent on your own payment, which is secured completely independently of fluctuations on the capital markets. This state leverage effect comes on top of the actual market return of your chosen ETFs and forms the financial-mathematical foundation of the reformed support system.

Distinction: subsidy return versus capital market return

It's important to clearly separate these two return components. While the capital market return depends on the performance of your ETFs or funds and is naturally subject to fluctuation, the subsidy return is a one-off, risk-free effect at the moment of payment. Through the allowances, the state effectively covers part of your savings rate. For every euro you pay in yourself, you receive direct financial support. This immediate return reduces the capital outlay you have to make out of your own pocket to reach a given retirement target. It acts as a stable buffer and accelerates the compound interest effect from the very start.

To calculate your personal subsidy rate and the resulting compound interest advantage precisely, you can use the subsidy calculator on our portal. As a neutral knowledge section, we help you assess the financial-mathematical advantages of the reform independently. Note: these model calculations are for illustrating the state subsidy rate only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

The support building blocks for 2027: BMF rules for the Altersvorsorgedepot

State support for the new Altersvorsorgedepot (AVD) from 2027 follows a clearly defined, tiered system set by the Federal Ministry of Finance (BMF)^[1]. This statutory structure forms the mathematical foundation for what financial experts call the subsidy return: a direct, state-guaranteed lever on your invested capital that works completely independently of future developments on the global equity markets. For you as a self-directed investor, this aspect is especially valuable, since it represents a predictable, risk-free return component. The official base rules are split into two main subsidy tiers, which depend on the exact level of your annual own contribution.

In the first subsidy tier, the state grants an allowance of 50 percent on all your own payments up to a limit of 360 euros per calendar year, equivalent to a maximum partial subsidy of 180 euros^[1]. For every further euro paid in above this threshold, you receive an additional subsidy of 25 percent, until the statutory ceiling for the subsidised own contribution of 1,800 euros is reached. In this second tier, the maximum support therefore amounts to a further 360 euros. In total, the annual Grundzulage at an own contribution of 1,800 euros comes to exactly 540 euros this way^[1].

This structure shows that state support acts like a guaranteed immediate return on your own capital. Anyone who, for example, pays in the full amount of 1,800 euros and receives a Grundzulage of 540 euros for it achieves an immediate return of 30 percent on their own outlay, even before the money is invested on the global capital markets. To align these effects precisely with your personal life situation and income, you can use our source-based subsidy calculator, which shows you the exact figures transparently. Understanding these mathematical fundamentals, within our knowledge section, is the ideal starting point for making a well-founded, independent decision about your private retirement provision.

Worked example table: how the own contribution becomes a percentage return

For self-directed investors who want to structure their retirement provision independently through low-cost ETFs, state support for the new Altersvorsorgedepot represents a significant lever. Rather than viewing the allowances merely as an abstract euro amount, you can calculate state support as a direct immediate return on the own capital invested. This subsidy return considerably increases the overall return on your investment, since it is achieved completely independently of the actual performance of the capital markets.

The calculation shows the enormous leverage effect of the state contributions on the capital you pay in. If, for example, you make an annual own contribution of 360 euros, you receive a state Grundzulage of 180 euros, which corresponds to a risk-free subsidy return of exactly 50 percent^[2]. Even at the maximum subsidised own contribution of 1,800 euros a year, the allowance of 540 euros secures you a guaranteed immediate return of 30 percent on your invested own capital. This percentage-point extra return acts like a massive performance boost that, with an unsubsidised investment, you would otherwise have to painstakingly earn on the equity markets over years. For a precise calculation of your personal subsidy rate and the long-term projection of your final capital, our source-based subsidy calculator is available to you free of charge.

Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. The model calculations shown are for illustrating the mathematical support effects only and do not constitute an investment recommendation or a guarantee of future performance.

Families and newcomers: extra bonuses as return drivers

State support for the new Altersvorsorgedepot unfolds an enormous leverage effect on your personal return, above all through targeted additional benefits. While the Grundzulage forms the foundation, the Kinderzulage of up to 300 euros per child and the one-off Berufseinsteiger-Bonus (the career-starter bonus) of 200 euros act as direct catalysts for what's known as the subsidy return. Mathematically speaking, these contributions drastically lower the own contribution needed to use up the maximum subsidy volume, which massively increases the percentage immediate return on your invested capital^[1].

This percentage immediate return is calculated by relating the state allowances directly to your own savings contribution. For young savers under 25, the one-off Berufseinsteiger-Bonus of 200 euros means an immediate increase in value in the account, even before the first market return on the chosen ETFs kicks in. For families with children, this leverage effect increases continuously: every state-subsidised euro reduces your real financial outlay for retirement provision, giving your own capital a far greater overall effect than would be the case with an unsubsidised savings plan.

To determine the exact subsidy rate for your individual life situation and run through various scenarios, you can use the subsidy calculator on our portal. Our knowledge section also has in-depth information on the exact statutory provisions of the Riester reform. Please note: the worked examples shown here are for illustrating the mathematical support effect only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Tax benefit: the invisible boost to the subsidy return

The tax benefit via the Sonderausgabenabzug (deduction as a special expense) acts as an additional, often underestimated return lever for the Altersvorsorgedepot. By taking your contributions into account for tax purposes, the tax office gives you a tax refund as part of the Günstigerprüfung (favourability check), which lowers your effective net own contribution^[3]. Mathematically, this saving can be interpreted directly as an immediate return on your invested capital, since you need to spend significantly less of your own money for the same account value.

The Günstigerprüfung as a return lever for high earners

For higher incomes, the tax office's Günstigerprüfung applies fully automatically. If your personal tax rate is high enough that the tax benefit from the Sonderausgabenabzug exceeds the Grundzulage paid out directly, the difference is credited to you as a tax refund^[3]. Anyone paying the top tax rate, for example, noticeably reduces their actual net outlay, while the full invested amount still works for the compound interest effect in the state-subsidised account. With our subsidy calculator, you can precisely simulate this effect for your individual taxable income.

• Reducing the own contribution: the tax refund lowers the capital you actually pay in (your net outlay).
• Unchanged account value: despite the net saving, the entire gross contribution, including the state allowances, works within the account.
• Increasing the effective return: since the return is calculated on the capital actually invested (the net own contribution), the percentage subsidy return rises significantly.
• Tax-free reinvestment: dividends and price gains in the Altersvorsorgedepot remain completely tax-free during the accumulation phase.

This tax refund thus represents a risk-free immediate return, completely independent of the equity market. While conventional ETF savings plans have to be funded entirely from income that has already been taxed, the Altersvorsorgedepot, through the Sonderausgabenabzug, allows a considerable optimisation of your own savings rate - explained in more detail in our knowledge section.

Compound interest effect: when the subsidy generates its own gains

State AVD support has its strongest effect not just at the moment it's credited, but over the decades of the accumulation phase. As a self-directed investor, when you make an own contribution and the state subsidises it through allowances or tax benefits, the total capital invested in your Altersvorsorgedepot increases immediately. This additional payment acts like an immediate return on your invested capital, working for you in your chosen ETF portfolio from day one. The support thus becomes a return generator in its own right, since it directly participates in the capital market's gains and dividend distributions.

Over a typical term of several decades, this mechanism leads to a massive compound interest lever. A concrete worked example illustrates this effect: with an annual own contribution of 1,260 euros and a maximum annual state allowance of 540 euros, a total of 1,800 euros a year flows into the account. Assuming an average annual market return of 6 percent and an accumulation phase of 30 years, the account grows before tax to around 142,305 euros. Deferred taxation applies to this gross final wealth in retirement, for which the Finanztip model uses an example rate of around 22.6 percent^[4]; ongoing product costs additionally reduce the result. Without the state leverage effect, you would have to spend considerably more of your own capital to reach the same investment volume.

To align such scenarios with your personal financial situation individually, our knowledge section offers comprehensive mathematical fundamentals and detailed guides. You can also use the interactive subsidy calculator to simulate your own subsidy return, based on official sources. Please note: all mathematical model calculations and procedures are for illustrating the state support logic only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Avoiding return killers: costs and deferred taxation

Anyone assessing the profitability of the new Altersvorsorgedepot shouldn't be dazzled by pure gross returns alone. While the state allowances and tax benefits act like a highly attractive immediate return on your own contribution, the real performance at the end of the term is decisively shaped by two factors: ongoing product costs and deferred taxation in the payout phase. Only those who factor in these deductions from the outset get a realistic picture of the actual net return and can make a well-founded decision on whether subsidised saving wins out over an unsubsidised ETF savings plan.

Account fees and deferred taxation in detail

Under the enacted final version of the law, the effective costs for the certified standard products may amount to a maximum of 1.0 percent per year^[4].^[5] For cost-conscious self-directed investors who would otherwise hold low-cost ETFs in a direct brokerage account, this cost cap is a critical factor. Every percentage point of fees considerably erodes the long-term compound interest effect over a term of thirty or forty years. On top of that comes the principle of deferred taxation. While payments and the returns generated remain completely tax-free during the accumulation phase, income tax applies to payouts in retirement. Here, the Finanztip model assumes a realistic average withdrawal tax rate of around 22.6 percent, corresponding to a reduced tax rate in old age^[4].

To precisely analyse this complex interplay of state support, ongoing costs and later tax burden for your personal situation, the subsidy calculator is available to you. It calculates the individual effects based on the statutory provisions, which we have also prepared on a source-based footing in our knowledge section. Please note the important legal notice here: all calculations and mathematical models are for guidance and illustration only. They do not constitute investment advice within the meaning of Paragraphen 1 Absatz 1a Nummer 1a KWG.

Action plan for self-directed investors: use the calculator and choose a provider

As a self-directed investor, you don't have to leave the profitability of state support to chance. With the abolition of classic contribution guarantees in the reform of private retirement provision, you can, for the first time, invest your capital flexibly on the capital market, while the state tops up your payments through allowances or tax benefits^[1]. To make this mathematical advantage tangible for your personal situation, a precise upfront comparison is advisable. With the subsidy calculator, you can work out your individual immediate return on your own contribution precisely and compare the future final capital directly with an unsubsidised ETF savings plan.

Once the mathematical basis is in place, practical implementation follows. Since the new Altersvorsorgedepot allows for self-directed portfolio management, you're no longer dependent on expensive insurance wrappers. For actually opening an account, our provider comparison tool is available to you. This tool helps you assess licensed neobrokers and account providers against hard criteria such as transaction costs, account fees and the quality of the ETF range on offer. This way you make sure your state subsidy return isn't eroded by unnecessary administrative costs.

1. Determine your income and family circumstances: work out your personal subsidy rate based on your previous year's income and any Kinderzulage payments.
2. Run your individual calculations: use the subsidy calculator to simulate your expected final capital and effective subsidy return.
3. Compare providers neutrally: use the provider comparison tool to filter for the most cost-effective account partner for your personal ETF savings plan.
4. Open an account directly online: carry out the switch or new investment independently through the neobroker of your choice.

All the model calculations and comparisons provided are for the neutral illustration of the statutory framework only and do not constitute investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. You can look up further details on the statutory basis at any time in our knowledge section.