Lifecycle model in the Altersvorsorgedepot: the glidepath explained simply
A lifecycle model, known in the jargon as a glidepath, is an investment strategy in which the equity allocation in the securities account is automatically reduced as you get older. Young savers get high return potential, older savers protection from crash risk. A lean alternative to the classic contribution guarantee.
What is a lifecycle model?
The lifecycle model follows a simple idea: risk decreases with age because the investment horizon gets shorter.
- At 25 a saver still has 40 years to sit out a crash.
- At 60 only 5 years; a crash would significantly reduce the final balance.
Instead of handling the reallocation yourself, the model does it for you automatically. In your younger years the money is almost 100% in equity ETFsand later it is continuously shifted into bonds.
How does that work in detail?
The provider defines a target allocation curvethat specifies what percentage of equities and what percentage of bonds should be held in each year of life. Once a year (or each quarter) the provider automatically checks whether the allocation still fits and shifts assets if necessary.
This is called rebalancing. It typically costs no extra fees because it is included in the reduction in yield (RIY).
How does the lifecycle model work in practice?
Young savers benefit from a high equity allocation, older savers from risk protection; the model switches over automatically.
A typical glidepath curve
| Age | Equity allocation | Bond/money market allocation |
|---|---|---|
| 20 to 35 | 90 to 100% | 0 to 10% |
| 36 to 45 | 80 to 90% | 10 to 20% |
| 46 to 55 | 60 to 75% | 25 to 40% |
| 56 to 60 | 45 to 60% | 40 to 55% |
| 61 to 65 | 30 to 45% | 55 to 70% |
| from 66 (decumulation phase) | 10 to 25% | 75 to 90% |
Illustrative values. Providers differ, especially in the pace of the shift in the last 10 years before retirement.
Lifecycle model or contribution guarantee?
| Aspect | lifecycle model | contribution guarantee |
|---|---|---|
| Protection mechanism | Reallocation | Insurance promise |
| Expected return | medium to high | low to medium |
| Costs | low (0.3 to 0.7% in the ETF default standard product) | higher (often 1.0 to 1.8%) |
| Flexibility | high, adjustable at any time | low, the guarantee is fixed |
| Risk during the investment phase | moderated | strictly limited |
| Suitability for long terms | very good | less good |
For long remaining terms the lifecycle model is usually the stronger-return choice . If you have 25+ years, you benefit from the high equity allocation in your younger years.
Advantages and disadvantages
Advantages
- No self-management needed: the reallocation runs automatically.
- High return in your younger years: full equity allocation without the drag of a guarantee.
- Risk protection before retirement: crash damage is limited.
- Low costs: as an ETF-based model typically under 0.7%.
- The subsidy rate is retained: the basic allowance and the tax deduction take full effect.
Disadvantages
- No insurance promise: in extreme market phases a lifecycle model can make a loss too.
- Standard curve: the fixed reallocation does not always match your individual risk appetite.
- Reallocation in bad phases: if the model sells at the wrong moment (e.g. after a crash), that can lock in the losses.
Which providers will offer a lifecycle model?
As things stand (May 2026), all robo-advisors and neobrokers plan to offer the lifecycle model as the default strategy in the default standard product . These include Trade Republic, Scalable Capital, ING and probably DKB and comdirect as well.
At traditional fund companies (Union, DWS, Fidelity) it will probably be chosen as the default strategy though savers can also select other models manually.
Frequently asked questions about the lifecycle model
How high is the equity allocation at the start?
With most providers 90 to 100%. Only from the mid-40s is it gradually shifted.
Can I choose the equity allocation myself?
With premium products often yes, with the default standard product usually not. If you want more control, look at the premium offering.
What happens in a crash?
The model does not sell in a panic but sticks to the glidepath. Advantage: you are not tempted to sell at the bottom yourself. Disadvantage: short-term losses are possible.
Does the lifecycle model cost extra?
No. It is included in the Reduction in yield of the product.
Are there lifecycle models outside the Altersvorsorgedepot too?
Yes, many robo-advisors (Scalable, Quirion, Whitebox) offer them for non-subsidized securities accounts. The principle is the same, just without the state subsidy.
What is the difference from a mixed fund?
A mixed fund has a rigid equity-bond ratio (e.g. 60/40). The lifecycle model adjusts the ratio dynamically to your age.
Is it better than a contribution guarantee?
Compared with a contribution guarantee it is usually the stronger-return and more flexible option.
Keep calculating and reading
Altersvorsorgedepot calculator Plus — calculate the subsidy, tax advantage and final balance for your own situation.
All terms at a glance: Glossary from A to Z.