It is official: Starting January 1, 2027, Germany will introduce the new Altersvorsorgedepot (AVD). It is the official successor to Riester, allowing savers for the first time to invest in ETFs and stocks with direct government subsidies, and without expensive capital guarantees. Here is what this means for expats.
Don’t lose years of compound interest waiting for 2027
While the subsidized Pension Depot will launch in 2027, every year of delay costs thousands in missed market growth. Through a fee-based ETF Net-Policy (Nettopolice), you can invest tax-sheltered with 0% ongoing capital gains tax and a 50% income-tax privilege in retirement immediately, and you can still add the new depot on top once it goes live.
Get notified when the Pension Depot launches
The Altersvorsorgedepot (the new state-subsidised Pension Depot) starts on 1 January 2027. Leave your email and I will let you know when it launches, with an overview of the subsidies and the most important deadlines. No spam, unsubscribe at any time. Until then: use my free checklist to see whether switching your Riester plan makes sense.
Why Riester Failed, and What Changes Now
The old Riester-Rente suffered from a strict legal requirement: insurers had to guarantee 100% of all paid-in contributions at retirement. During decades of low interest rates, this meant that insurers could not invest in high-yield stock markets. Instead, they had to buy low-yielding government bonds. High administrative costs ate up the remaining returns.
The new Altersvorsorgedepot abolishes this guarantee requirement. You will be able to manage your account yourself and invest up to 100% in low-cost, globally diversified ETFs.
The Subsidies: How Much the State Gives You
The state support for the Altersvorsorgedepot is a combination of direct bonuses and tax write-offs:
- Basic Bonus: You receive 50% on the first €360 of your own contributions (max. €180) and 25% on further contributions up to €1,800 (max. €360), so up to €540 per year in total. If you sign up before your 25th birthday, you also get a one-off €200 starter bonus.
- Child Bonus: For each child eligible for child benefit (Kindergeld), you receive €1.00 per €1.00 of your own contribution up to €300, meaning the full €300 per year per child from an annual contribution of €300.
- Tax Deduction: Your contributions of up to €1,800 per year (plus subsidies) can be deducted from tax as special expenses. In total, you can pay in up to €6,840 per year; earnings are not taxed during the accumulation phase.
- Tax-Free Growth: During the accumulation phase, dividends and capital gains inside the depot are not taxed. Only when you withdraw money in retirement will it be taxed (deferred taxation).
What Happens to Existing Riester Plans?
Existing Riester plans are grandfathered. You can choose to keep them running as they are.
However, the law explicitly allows you to transfer your accumulated Riester savings into the new Altersvorsorgedepot from 2027 without losing your subsidies (the provider may charge switching costs). For younger savers, this is often worth considering, as the growth potential of a global ETF depot far outweighs the old Riester guarantees. When keeping, transferring or cancelling makes sense is covered in Cancel, keep or transfer your Riester plan?
Prepare Today Instead of Waiting
Even though the Altersvorsorgedepot starts in 2027, you should plan your strategy today. Current retirement plans must be flexible enough to allow transfers or adjustments later. As your neutral insurance broker, I can help you structure your retirement portfolio to be future-proof.
The Best German Pension Reform in Decades
The Altersvorsorgedepot 2027 is a massive step forward. It finally combines significant tax write-offs and government cash bonuses with the wealth-building potential of the global stock market.
Checklist: The Altersvorsorgedepot At a Glance
- Government Cash: Up to €540 basic bonus annually + €300 per child.
- No Guarantee Costs: 100% ETF allocation for maximum compounding power.
- Portability: Transfer old Riester capital into the new depot from 2027.