Altersvorsorgedepot glossary: all terms from A to Z

Key terms around the Altersvorsorgedepot

The following 33 topics have their own detailed glossary page with model calculations, personas and FAQs:

• Altersvorsorgedepot, the new state-subsidized securities account from 2027 at a glance.
• basic allowance, up to €540 per year from the state, in proportion to what you pay in.
• child allowance, €300 per child per year, from an own contribution of just €25 per month.
• career starter bonus, a one-off €200 if you sign up before your 25th birthday.
• Günstigerprüfung (more-favourable-treatment check), the tipping point between allowance and tax deduction, calculated by number of children.
• minimum own contribution, the three thresholds of €120, €300 and €1,800 cleanly separated.
• permanent allowance application, file it once and it stays valid. The pitfall when switching providers.
• Frühstart-Rente (early-start pension for children), the child’s own securities account from age 6, set apart from the child allowance.
• default standard product, the statutory basic offering with a cost cap of 1% per year.
• Reduction in yield, the metric that lets you compare offers honestly.
• Deferred taxation, save tax today, pay tax later in retirement.
• special expenses deduction, €1,800 plus your allowance entitlement as the assessment basis.
• life annuity, the lifelong monthly pension in the Altersvorsorgedepot.
• drawdown plan to age 85, the flexible alternative to the life annuity.
• contribution guarantee, the optional 80 or 100 percent guarantee.
• ETFs in the Altersvorsorgedepot, definition, selection and tax rules.
• regular savings plan, save automatically every month and make use of cost averaging and compounding.
• Pension gap, estimate the gap and read off the contribution you need by starting age.
• Inflation and purchasing power, nominal versus real, and why guarantees lose in real terms.
• Riester pension vs. Altersvorsorgedepot, what happens to old contracts?
• Altersvorsorgedepot vs. Rürup pension, a comparison specifically for the self-employed.
• Retirement Provision Reform Act, the law behind the reform.
• Common mistakes, the 10 typical pitfalls and how to avoid them.
• Anlage AV, entering contributions in your income tax return, step by step.
• compound interest, why starting early changes everything, with model calculations over 40 years.
• return, what is realistically achievable, depending on the AVD variant.
• Switching from Riester to the Altersvorsorgedepot, when is it worth it and when is it not? Step by step.
• Switching provider, transfer instead of cancelling, calculated by remaining term.
• Non-qualifying withdrawal, what cancelling costs and what you can do instead.
• The self-employed in the Altersvorsorgedepot, fully eligible for the subsidy for the first time from 2027, with examples for freelance professionals.
• ZfA (allowance office), the authority behind the allowances, process and timing.
• lifecycle model, a glidepath as a high-return alternative to the contribution guarantee.
• Inheriting the Altersvorsorgedepot, any remaining capital passes to the heirs, unlike with Rürup.

Glossary from A to Z

62 terms around the Altersvorsorgedepot, briefly defined. Linked terms have their own detailed glossary page.

A

• Flat-rate withholding tax on investment income, a flat 25% tax on capital income. In the Altersvorsorgedepot it does not apply; returns are only taxed in retirement.
• Equities, shares in companies, permitted in the Altersvorsorgedepot as a direct investment or through ETFs.
• Altersvorsorgedepot, a state-subsidized securities account that replaces the Riester pension from 1 January 2027.
• Retirement Provision Reform Act, a federal act from spring 2026; creates the Altersvorsorgedepot and the Frühstart-Rente.
• Switching provider, changing your account provider. Simplified by law; a maximum fee of €150 in the first 5 years.
• Anlage AV, the income tax return form for contributions to subsidized retirement provision. Triggers the more-favourable-treatment check.
• Bonds, fixed-income securities (e.g. government bonds), permitted as a safe addition in the securities account.
• Accumulation phase, the period in which savers pay in contributions and the capital is invested.
• Accrued entitlement, the capital saved so far plus the allowances received.
• drawdown plan to age 85, a flexible payout option: the account balance is paid out evenly up to the age of 85.
• decumulation phase, begins between the ages of 65 and 70; a choice between a life annuity and a drawdown plan.

B

• Civil servants, are directly eligible for the subsidy after the reform if they consent to their data being transmitted to the ZfA.
• contribution guarantee, the provider’s promise that the contributions paid in will be preserved in full or in part at the start of retirement.
• career starter bonus, a one-off allowance of €200 when you sign up before your 25th birthday.
• Professional pension schemes, pension funds for doctors or lawyers, for example. Their members are also eligible for the subsidy from 2027.
• Riester grandfathering, existing Riester contracts continue unchanged; allowances are retained.
• Federal Central Tax Office (BZSt), certifies retirement provision contracts and reviews providers.

C

• Cost averaging, with a savings plan you buy more units when prices are low and fewer when prices are high. This lowers entry risk over the long term.

D

• permanent allowance application, a one-off power of attorney authorizing your provider to apply for the allowance automatically at the ZfA every year. It has to be granted again when you switch providers.
• Diversification, spreading risk by distributing capital across many investments. ETFs on the MSCI World, for example, cover around 1,500 stocks.
• Three-pillar model, German retirement provision with the statutory pension (pillar 1), occupational pensions (pillar 2) and private provision (pillar 3). The Altersvorsorgedepot belongs to pillar 3.

E

• Reduction in yield, the loss of return caused by all costs together. Capped at a maximum of 1% p.a. for the default standard product.
• ETF, exchange traded fund. An exchange-traded index fund with low fees, the core investment in the Altersvorsorgedepot.

F

• Maximum subsidized amount, the maximum own contribution eligible for the subsidy: €1,800 per year for the basic allowance; a further €5,040 can be paid in without subsidy.
• Subsidy rate, the share of government subsidy in the total amount saved. The lower your income, the higher the subsidy rate.
• Non-qualifying withdrawal, cancelling or withdrawing outside the rules. Allowances and tax advantages are reclaimed. Suspending contributions is usually the better route.
• Funds, pooled assets in which investors’ money is invested according to a defined strategy. Actively managed or passive (ETF).
• Frühstart-Rente (early-start pension for children), a child’s own subsidized securities account for children aged 6 to 18, with €10 per month from the state. Separate from the child allowance, which flows into the parents’ securities account.

G

• Guarantee product, an Altersvorsorgedepot variant with a promised contribution guarantee (80% or 100%).
• Statutory pension insurance, the first pillar of retirement provision. Compulsory insurance for most employees.
• basic allowance, a direct government payment of up to €540 per year.
• Günstigerprüfung (more-favourable-treatment check), the tax office automatically compares the allowance with the special expenses deduction and applies whichever route is better for you. This requires Anlage AV.

H

• Common mistakes, the ten pitfalls that cost savers the most money in the Altersvorsorgedepot.

I

• Inflation, nominal is the figure on your account statement, real is what you can actually buy with it. Over 30 years the two values are far apart.
• ISIN, International Securities Identification Number, a 12-character code that uniquely identifies every security.

K

• child allowance, €300 per year for each child you receive child benefit for, available in full from an own contribution of just €300.

L

• lifecycle model, the equity allocation falls automatically as the start of retirement approaches. An alternative to a fixed contribution guarantee.
• life annuity, a lifelong monthly pension payment; the amount follows from the annuity factor.

M

• minimum own contribution, €120 per year, or €10 a month. If you stay below that, you lose the allowance entirely, including the child allowance.

N

• Deferred taxation, tax savings today (during the accumulation phase), taxation at your personal tax rate later when the money is paid out.
• Neobroker, digital securities brokers (Trade Republic, Scalable, Finanzen Zero); many are expected to offer Altersvorsorgedepots from 2027.

P

• Compulsorily insured persons, people insured under the statutory pension insurance. They are automatically eligible for the subsidy.
• Private retirement provision, pillar 3 of retirement provision. Examples: the Altersvorsorgedepot, Rürup, private pension insurance.

R

• return, the percentage return on an investment. The long-term return on equities has historically been around 6–8% per year.
• Annuity factor, indicates how many euros of monthly pension are paid out per €10,000 of capital.
• Pension gap, the distance between your last net income and your later statutory pension. It is the starting point for every contribution.
• Riester pension, the predecessor of the Altersvorsorgedepot; no new contracts from 2027, existing contracts remain.
• Robo-advisor, a digital asset manager that runs ETF portfolios automatically. One possible provider type.
• Rürup pension, the Basisrente under § 10 EStG, aimed specifically at the self-employed. Unlike the Altersvorsorgedepot it cannot be inherited or used as loan collateral.

S

• Self-employed, eligible for the subsidy in full for the first time from 2027, regardless of compulsory pension insurance.
• special expenses deduction, contributions of up to €1,800 plus your allowance entitlement are tax deductible.
• regular savings plan, the automatic regular purchase of ETFs or funds, the heart of a good Altersvorsorgedepot.
• default standard product, the statutory basic product every provider has to offer, with a cost cap.

T

• Partial lump-sum payment, up to 30% of the account value may be withdrawn as a one-off payment at the start of retirement.
• TER (Total Expense Ratio), the ongoing annual costs of an ETF or fund, expressed as a % of the amount invested.

V

• Inheritance, any remaining capital passes into the estate. Unlike the Rürup pension, where the balance lapses in the standard case.
• Vorabpauschale (advance lump-sum taxation), the investment tax on accumulating funds. In the Altersvorsorgedepot it does notapply, because returns are only taxed in the decumulation phase.

W

• Securities account, an account for holding securities. The Altersvorsorgedepot is a special, subsidized form of it.
• Wohn-Riester, a variant of the Riester pension for financing an owner-occupied home. A direct housing variant is not planned for the Altersvorsorgedepot (as of 2026).

Z

• Zentrale Zulagenstelle für Altersvermögen (ZfA), the authority at Deutsche Rentenversicherung Bund that administers and pays out the allowances.
• Certification, a precondition for the subsidy: every contract has to be certified by the BZSt.
• compound interest, returns generate further returns. Over 40 years that quickly turns €100/month into six-figure sums.