Altersvorsorgedepot advantages and disadvantages: what speaks for it and what does not
€540 a year from the state, a tax-free securities account, a full equity allocation: the Altersvorsorgedepot sounds like the most attractive retirement product in decades. For many people it will be exactly that. Even so, there are points you do not see at first glance. Those are precisely the ones we look at together here.
From 1 January 2027 the Altersvorsorgedepot replaces the Riester pension as the state-subsidized form of private retirement provision in Germany. If you know the advantages and disadvantages now, you will make a well-founded decision at launch. No product recommendations, just facts.
In brief: The Altersvorsorgedepot is a state-subsidized securities account that will replace the Riester pension as the central form of private retirement provision from 2027. You can invest in it entirely in ETFs and funds, but in return you give up a contribution guarantee. The government subsidizes your contributions with up to €540 basic allowance a year plus up to €300 child allowance per child. Gains and switches remain tax-free during the accumulation phase.
The key points at a glance
The government subsidizes your Altersvorsorgedepot with up to €540 basic allowance a year, plus up to €300 child allowance per child.
By giving up a contribution guarantee, you can invest entirely in ETFs and benefit from the market return.
Your capital is tied up until the age of 65. If you withdraw earlier, you have to repay all allowances and tax advantages.
For low earners with several children, the old Riester subsidy can be more advantageous in individual cases.
The first products can only be taken out from 1 January 2027.
The 6 biggest advantages of the Altersvorsorgedepot
Compared with the Riester pension, the Altersvorsorgedepot brings you several real improvements:
1. Government subsidy of up to €540 a year
How much you get depends on how much you pay in. On the first €360 a year the government adds 50 percent, so a maximum of €180. On every further euro up to an annual contribution of €1,800 another 25 percent is added on top, so up to €360. That puts the maximum basic allowance at €540 per year.
For each child you receive child benefit for, up to €300 child allowance a year is added. Career starters under 25 also receive a one-off €200 starter bonus.The subsidy structure is published in the Federal Ministry of Finance FAQ on the reform of private retirement provision .
2. Full equity allocation by giving up the guarantee requirement
Because of the contribution guarantee, classic Riester products had to invest a large part of the money in low-risk assets. That systematically limited return potential. The Altersvorsorgedepot has no such obligation. You can invest up to 100 percent in ETFs and funds and align the account entirely with ETF returns. Over a long investment horizon, that can make a big difference to your return in the end.
3. Tax-free growth during the accumulation phase
Price gains and income in the Altersvorsorgedepot are not taxed during the accumulation phase. Neither flat-rate withholding tax on investment income nor the Vorabpauschale (advance lump-sum taxation) applies. Your money grows unchecked thanks to compounding. You only pay tax in the decumulation phase, at the personal income tax rate applicable then. For many people that rate is lower in retirement than during working life.
4. Tax-free switching within the securities account
If you sell funds in an ordinary securities account and buy others, you pay flat-rate withholding tax on investment income on the price gains. In the Altersvorsorgedepot such switches are tax-free, no matter how often you make them or how large the gain. If you want to move your account from return-oriented into lower-risk investments in the years before retirement, you can do so without any tax disadvantage.
5. Broader eligibility for the subsidy than with Riester
The Riester pension was aimed mainly at employees with compulsory insurance. The Altersvorsorgedepot applies to considerably more people. Those eligible for the subsidy include employees, the self-employed, civil servants and trainees, as well as people on parental leave or receiving unemployment benefit I.
6. Transparency and free switching between providers
You can switch provider at any time. In the first five contract years the transferring provider may charge at most €150 and after that the switch is free of charge. Providers have to disclose their costs transparently, and you can check how your securities account is developing at any time.
In short: The Altersvorsorgedepot combines a government subsidy with real capital market returns. Allowances of up to €540 a year, no tax on gains during the accumulation phase and tax-free switching make it more attractive for many savers than classic Riester products.
The 5 Altersvorsorgedepot disadvantages: who they really matter for
The following points are real. The only question is whether they actually carry weight for you.
1. No capital protection
The Altersvorsorgedepot has no contribution guarantee. Your account can slip well into the red in the meantime, for example if stock markets fall sharply. If you still have 20 years or more until retirement, you can sit that out. If you are close to it, you lack that buffer. For such cases there are guarantee products with 80 or 100 percent capital preservation, though at the cost of a lower return.
2. Capital tied up until 65
Your money in the Altersvorsorgedepot is earmarked for a specific purpose. If you withdraw before the age of 65, you have to repay all allowances and tax advantages. This is known as a non-qualifying withdrawal. Your securities account is therefore not suitable as an emergency fund or as a substitute for liquid reserves. One exception: if you use the capital for owner-occupied residential property, you do not lose the subsidy.
3. Deferred taxation of the payout
In retirement you pay your personal income tax rate on payouts. With an ordinary securities account only the flat-rate withholding tax on investment income applies, which is cheaper in many cases. The difference shrinks, however, because most people earn less in old age and therefore also have a lower tax rate.
4. Low earners with several children: Riester can remain the better option
For households with a low income and several children, the subsidy calculation for the Altersvorsorgedepot is not automatically more favorable. Under the old Riester system, child allowances were paid regardless of income. With the Altersvorsorgedepot the child allowance depends on how much you pay in yourself. If you pay in little, you therefore also receive less. Whether switching still makes sense is shown in the guide comparing Riester and the Altersvorsorgedepot.
5. A cost cap of one percent is no bargain
For default standard products a statutory cost cap of one percent reduction in yield (RIY) per year applies. This is intended to protect newcomers from overpriced products. One percent is comparatively high, though. If you know low-cost index ETFs, you know that it can be done far more cheaply. If you choose a cost-conscious provider yourself, you stay below this cap.
In short The main disadvantages are the lack of capital protection, being tied in until 65, taxation of the payout at your personal tax rate, and a weaker subsidy rate for low earners with several children. On top of that, not every product carrying the label “Altersvorsorgedepot” is a low-cost securities account.
Careful: not every Altersvorsorgedepot is a real securities account
Alongside banks, neobrokers and fund companies, insurance companies may also offer Altersvorsorgedepots, in that case in the form of a unit-linked pension insurance policy. The government subsidy and the tax treatment are identical to a real securities account. The difference lies in the costs: such products can include acquisition costs and higher ongoing administration fees that go well beyond the cost framework of a pure securities account.
So if you take out a product in 2027, check the product type and the full cost structure before you sign. As soon as the first providers present their products, you will find the direct comparison here.
Who do the advantages outweigh the disadvantages for?
If you still have a long investment horizon of 15 years or more, the advantages clearly outweigh the disadvantages for you. On current assessment, employees, the self-employed, singles, couples without children and high earners are better off under the new system than under the old Riester system. Career starters under 25 also benefit from the one-off €200-starter bonus.
For low earners with several children and little room to pay in, a close comparison of the subsidy conditions is worthwhile before a decision is made. Whether the Altersvorsorgedepot is the better choice for your personal situation depends on your income, your family situation and your investment horizon.
Conclusion
For many people the Altersvorsorgedepot brings real improvements over the Riester pension: more return potential, broader eligibility for the subsidy and more transparency. If you know the advantages and disadvantages of the Altersvorsorgedepot now, you will be better positioned at the 2027 launch than someone who only looks into it when taking out a product.
The first providers launch on 1 January 2027. We will let you know as soon as the products are live so that you can compare right away.
Does the Altersvorsorgedepot have a contribution guarantee?
No, the Altersvorsorgedepot has no contribution guarantee. The value of the account can fall in the meantime. For safety-conscious investors there are optional guarantee products with 80 or 100 percent preservation of contributions, which secure a minimum share, though at the expense of the return.
What is the biggest disadvantage of the Altersvorsorgedepot?
The decisive disadvantage is that the capital is tied up until the age of 65. Anyone who withdraws money before then has to repay in full all allowances and tax advantages received. The Altersvorsorgedepot is therefore suitable exclusively for long-term retirement provision, not as a savings contract with flexible access.
Who is the Altersvorsorgedepot not worthwhile for?
The Altersvorsorgedepot is less worthwhile for low earners with several children who received high child allowances under the old Riester subsidy logic. For people very close to retirement, too, a capital market product without a guarantee is only suitable to a limited extent.
What happens if I withdraw money from the Altersvorsorgedepot before the age of 65?
An early withdrawal counts as a non-qualifying withdrawal. You have to repay all allowances and tax advantages received. An exception applies to using the balance for owner-occupied residential property: this withdrawal is expressly permitted and does not count as non-qualifying.
Is the Altersvorsorgedepot safe in a stock market crash?
The Altersvorsorgedepot offers no capital protection. If prices fall sharply, the value of the account can drop considerably. Anyone with many years still to go until retirement can, historically speaking, sit out such phases. For people close to retirement there are guarantee products that secure a minimum share of the capital.
Lawyer & financial market expert · AVD Anbieter Vergleich
Rolf Henning Hackel is a qualified lawyer who has spent more than 22 years as a board member and managing director at various software providers to the financial industry, and as a founder himself. As a thorough market expert he knows not only the different providers but also the financial industry’s products, their strengths and weaknesses, and the regulatory framework around them. At AVD Anbieter Vergleich he writes about the new Altersvorsorgedepot and explains subsidies, providers and return potential in plain language — independently and free of advertising.
