Drawdown plan to age 85: the flexible alternative to a life annuity
The drawdown plan to age 85 is one of the two payout options in the Altersvorsorgedepot. The account balance is spread evenly over the months up to your 85th birthday . A major advantage: on death, any remaining capital can be inherited.
Table of contents
What is the drawdown plan to age 85?
A payout format in which the account balance is not converted into a lifelong life annuity but instead runs as a drawdown plan for at least 18–20 years, starting between 65 and 70, at least until the age of 85 is reached.
How does the drawdown plan work?
- At the start of retirement you can optionally withdraw up to 30% as a lump sum.
- The remaining balance stays in the securities account and continues to be invested.
- The provider calculates the monthly payout as current balance ÷ remaining months.
- If the investment performs well, the monthly payout rises over time; if it performs poorly, it falls.
- By 85 at the latest the securities account is empty (or the payout is extended).
What sets the drawdown plan apart from the life annuity?
The drawdown plan is the flexible alternative to the life annuity. The monthly amount is not guaranteed, but the capital can still be inherited.
Worked example
Advantages of the drawdown plan to age 85
- Inheritable: On death, any remaining capital passes to the heirs.
- Return potential: The securities account stays invested and can keep growing.
- Transparency: You know exactly how much money is there.
- Flexibility: More freedom of choice in provider and investment strategy.
Disadvantages and risks
- No protection against extreme longevity (beyond age 85).
- If markets perform poorly, the monthly amounts fall.
- You carry more personal responsibility than with a life annuity.
Real-life examples of the drawdown plan
Martin, 67, account value €150,000, 18-year term. At a 4% residual return he receives about €900/month. If he dies at 78, the remaining balance (~€70,000) goes to his children.
Sigrid, 70, account value €80,000, wants to still have money at 85. She chooses a 20-year term. At a 4% return, about €460/month until her 90th birthday.
Frequently asked questions about the drawdown plan to age 85
What happens after the age of 85?
The balance is used up by then. Anyone who lives longer has to live on the statutory pension or other sources. Some providers offer the option of a subsequent life annuity.
Can I stay in the securities account after 85?
Yes, the drawdown plan may run longer as long as a balance remains.
Is the drawdown plan taxed in full?
Yes, at your personal income tax rate (deferred taxation).
Can I extend the drawdown plan beyond 85?
Yes, with most providers, although longevity risk increases.
Does the money stay invested?
Yes, the securities account stays invested, typically with a reduced equity allocation.
Is the payout recalculated every year?
Yes, it is normally adjusted annually to the remaining balance and the remaining term.
Who is the drawdown plan worth it for?
If you want to leave remaining capital to your heirs, you should choose the drawdown plan.
Last updated: June 2026.
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Official sources and further information
- Federal Ministry of Finance, FAQ on the reform of private retirement provision
- German federal government, private retirement provision reform
- German Bundestag, resolution on the Altersvorsorgedepot (calendar week 13/2026)
- Bundestag printed paper 21/4088 (PDF)
- Deutsche Rentenversicherung, reform announcement
- Stiftung Warentest, Altersvorsorgedepot
- Verbraucherzentrale, the new Altersvorsorgedepot: opportunity or sales trap?