What is the Altersvorsorgedepot?
Starting January 1, 2027, Germany introduces a completely new state-subsidized retirement product: the Altersvorsorgedepot (private retirement depot). It replaces the widely criticized *Riester-Rente* with a modern, transparent, ETF-friendly account, much closer to a US 401(k) or UK SIPP in spirit.
For expats living and working in Germany, this is one of the biggest changes to private pension planning in 20 years. Understanding it early lets you position yourself for tens of thousands of euros in state subsidies over your working life.
> In short: You invest into ETFs, funds, or ETF savings plans inside a special depot. The state adds an annual bonus on top of your contributions, and gains grow tax-free until retirement.
Want to calculate how much your future contributions could grow? Try our compound interest calculator.
Why Germany Is Introducing It
The classic Riester-Rente failed for three reasons:
- High costs, most contracts had hidden fees eating 30–50% of returns
- Weak investment options, mostly low-yield insurance products
- Complex bureaucracy, many expats and employees never received their subsidies at all
The new Altersvorsorgedepot fixes all three. Providers must offer ETFs and low-cost funds, fee structures are capped and transparent, and the state subsidy is paid automatically once your data is registered.
This matters especially for internationals. See our overview of the 5 most costly mistakes expats make, missing government subsidies consistently ranks in the top three.
How It Works in Practice
The Altersvorsorgedepot is structured around three pillars:
1. Your own contributions
You pay in up to €3,500 per year (planned; final figures will be locked in by the Bundestag). Contributions are flexible, pause, reduce or increase at any time.
2. State subsidy (Grundzulage)
The state adds €0.20 for every €1 contributed, capped at approximately €600 per year. Families with children receive an additional child bonus.
3. Tax-free growth phase
All dividends, interest and capital gains inside the depot are tax-free during the accumulation phase. Taxation only applies when you draw the money in retirement, typically at a much lower personal tax rate.
> Example: A 35-year-old expat contributing €200/month until age 67, invested in a global equity ETF at 6% p.a. could accumulate €270,000+, including roughly €19,000 in pure state subsidies.
Key Features at a Glance
| Feature | Altersvorsorgedepot (from 2027) | Riester (until 2026) |
|---|---|---|
| Investment style | ETFs, funds, ETF savings plans | Mostly insurance-based |
| Max. contribution | ~€3,500/year (planned) | €2,100/year |
| State subsidy | 20% of contribution, up to ~€600/year | Fixed €175 + child bonus |
| Guarantee on paid-in capital | No mandatory 100% guarantee | 100% guarantee required |
| Payout | Flexible, lump sum or annuity | Mostly forced annuity |
| Fees | Capped & transparent | Often 30–50% return drag |
| Portability if leaving Germany | Being clarified in final law | Subsidy typically clawed back |
Who Should Consider It?
The Altersvorsorgedepot will make sense for most employees and self-employed people in Germany, but especially for:
- Long-term residents planning to retire in Germany or the EU
- Middle-income earners who benefit most from the 20% state top-up
- Families with children, thanks to child bonuses
- ETF investors who want a tax-advantaged wrapper for global equity ETFs
- Ex-Riester holders looking to migrate legacy contracts
It is less attractive if you plan to leave Germany within a few years, the exact rules on subsidy clawback for expats leaving the EU/EEA are still being finalized. We track this closely; check the retirement planning guide for expats for updates.
What Expats Specifically Need to Watch
Several details of the new law matter more for internationals than for German citizens:
- Tax residency at payout. Payments in retirement are taxed in your country of residence at that time, subject to the relevant double taxation treaty.
- Cross-border portability. Moving within the EU/EEA should preserve subsidies; leaving the EU may trigger repayment. Final wording pending.
- Currency risk. The depot is EUR-denominated; if you plan to retire in USD/GBP/CHF, factor in FX exposure.
- Interaction with home-country pensions. US 401(k), UK SIPP or similar accounts follow their own rules and are usually reported separately.
Our ETF vs. insurance wrapper comparison explains how to think about wrapping ETFs efficiently under German tax law.
What to Do Now (2026)
Even though the depot launches in 2027, decisions made in 2026 already matter:
- Don't sign a new Riester contract. Riester will effectively be discontinued for new customers.
- Review existing Riester contracts. Many will be transferable into the new depot; others should be paused or made paid-up.
- Free up monthly budget for the new depot: even €100–200/month secures a significant chunk of the annual state subsidy.
- Model your gap with our retirement gap calculator so you know how much monthly saving you actually need.
- Consider the tax angle, for high earners, combining the depot with other vehicles (bAV, ETF wrapper, Rürup) can meaningfully cut taxes today. See our tax tips for expats.
Common Misconceptions
"It's just Riester with a new name."
No. The investment logic, cost structure and guarantee rules are fundamentally different. This is the first genuinely equity-friendly state-subsidized product in Germany.
"I lose everything if I leave Germany."
Not necessarily. Within the EU/EEA, subsidies should be preserved. Outside the EU, treatment depends on the final law and double-taxation treaty.
"The state subsidy is small, not worth the effort."
Over a 30-year horizon, €500–600/year in guaranteed state top-up, compounding tax-free at 5–6%, translates into €40,000+ in additional retirement capital, for essentially free.
"I already have a company pension (bAV), I don't need this."
The two are complementary. The Altersvorsorgedepot fills the *private* pillar; bAV is the *occupational* pillar. Most expats need both.
Our Recommendation
The Altersvorsorgedepot is the single most important private-pension change for expats in Germany in a generation. The right setup depends on your income, residency plans, existing contracts and tax situation.
We help expats:
- Decide whether to keep, pause or migrate legacy Riester contracts
- Choose the right depot provider once products go live in 2027
- Combine the depot with bAV, ETF investing and, where appropriate. Rürup
- Model the outcome over your realistic time horizon in Germany
Start a no-obligation conversation with us to get a tailored plan before the 2027 launch, and use our insurance check to make sure your protection side is aligned.
> Disclaimer: This article reflects the current state of the draft legislation (as of 2026). Final parameters, contribution limits, subsidy amounts, portability rules, will be confirmed by the Bundestag before launch. This is educational content and not individual tax or investment advice.