The Altersvorsorgedepot (2027): a plain-language guide — and is it right for you?

📍 A note for our English-speaking readers: This article is about a retirement product that is specific to Germany — the Altersvorsorgedepot. It's relevant if you live and pay taxes in Germany. If you're elsewhere in Europe, the general idea (state-subsidised retirement investing) exists in many countries, but the rules and numbers below apply to Germany only.

From 2027, Germany gets a new state-subsidised retirement scheme: the Altersvorsorgedepot ("retirement provision account"). It replaces the old Riester pension and works differently from most of what came before — you invest in ETFs and funds, and the state adds money on top. The law behind it (the Altersvorsorgereformgesetz) was passed by the Bundestag on 27 March 2026 and approved by the Bundesrat on 8 May 2026. It is set to launch on 1 January 2027.

This article explains, in plain language, what the Altersvorsorgedepot is, how it differs from a normal ETF savings plan — and, honestly, who it makes sense for and who it doesn't.

What is the Altersvorsorgedepot?

It's a securities account designed specifically for retirement. You pay in regularly, the money is invested in ETFs or funds, and the state rewards your contributions with subsidies and tax advantages.

Unlike the old Riester pension, there is no requirement for a contribution guarantee. That means you can invest 100% in an equity ETF if you want — which historically offers better long-term returns. If you prefer more safety, you can also choose a variant with a partial or full guarantee — but safety has a price: cushioning the market means holding a larger share in lower-return assets, and giving up part of the long-term return potential.

The account allows UCITS ETFs, actively managed funds, and EU government bonds. It does not allow single stocks, cryptocurrencies, or derivatives.

How it differs from a normal ETF savings plan

The key difference compared to a regular ETF savings plan in a free brokerage account:

• With a free ETF account, you invest your own money and can access it anytime — but you pay the annual Vorabpauschale and capital-gains tax (Abgeltungsteuer) when you sell.
• With the Altersvorsorgedepot, the state adds money and there's no tax during the savings phase — but your money is locked until retirement.

In short: more subsidy and tax benefit, in exchange for less flexibility.

What you get — the three benefits

1. Base subsidy up to €540 per year. The state adds 50% on contributions up to €360, and 25% on further contributions up to €1,800. So if you pay in €1,800 a year, you get €540 on top.

2. Child subsidy up to €300 per child per year. Here the state matches 100% of your own contribution up to €300 — effectively doubling it. Especially attractive for parents making smaller contributions.

3. Tax advantage. During the savings phase you pay neither capital-gains tax nor the Vorabpauschale — your money grows undisturbed. Tax only applies on payout in retirement (deferred taxation), usually at a lower personal rate than today. On top of that, contributions up to €1,800 can be deducted as special expenses to lower your current income tax.

Who is it for — and who isn't it for?

Here's the honest part, because the Altersvorsorgedepot is not a free lunch.

It fits well if …

• you're saving long-term for retirement anyway and won't need the money before then,
• you want to collect the subsidies — especially worthwhile if you have children,
• you value the tax advantage and skipping the Vorabpauschale.

It's probably not for you if …

• you might need the money sooner — in the Altersvorsorgedepot your capital is locked until retirement, with no early withdrawal,
• you want maximum flexibility,
• you don't yet have an emergency fund. Build that first, before locking money away long-term.

For many people the combination makes the most sense: first a free, flexible ETF savings plan for medium-term goals — and the Altersvorsorgedepot on top for the long-term retirement portion. It's not an either/or.

One last honest note on costs: the state's standard product may charge at most 1% per year. Even so, watch the fees closely — 1% over 30 years costs noticeably in returns. Providers with free ETF savings plans have a clear advantage here.

What if retirement is already closer — at 40, 50 or 60?

A fair question: is an Altersvorsorgedepot still worth it if there aren't many years left until retirement?

The biggest advantage of an equity ETF is a long time horizon — time for compounding to work and for market dips to recover. With 30 years to go, a temporary crash has time to bounce back; with 60, much less. That's why the scheme automatically shifts your capital gradually out of equities and into safer assets in the final years before retirement.

But that doesn't make it pointless closer to retirement. The subsidies and tax advantage work at any age — the up to €540 per year is attractive regardless of your time horizon. As a rough guide: the closer you are to retirement, the more the state subsidy matters — and the more cautious your equity share should be, because there's less time to sit out the swings.

So what now?

The Altersvorsorgedepot doesn't launch until 2027 — but compound growth starts the moment you begin. If you're unsure which allocation even fits your situation, you can find out in a few minutes with our free questionnaire — no sign-up, no ads, no commission.

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This article is general information, not investment or tax advice. The legal details are still being finalised ahead of the 1 January 2027 launch and may change.