The Altersvorsorgedepot (Riester 2.0) Explained

Status: November 2026. The law was published in May 2026 (BGBl. 2026 I Nr. 156) and applies from 1 January 2027. Some details, especially which products and prices providers will actually offer, will only become clear once the market opens.

What it is

From 1 January 2027, the Altersvorsorgedepot (“retirement savings depot”, often called Riester 2.0) replaces Riester as Germany’s state-subsidised private pension. The basic idea stays the same: you save towards retirement in a certified contract, and the state adds allowances and tax relief.

What changes is how the money can be invested. Riester contracts had to guarantee 100% of contributions at retirement, which pushed most of the money into low-yielding, safe investments. In the new system guarantees are optional, so the money can be invested in funds, ETFs and government bonds.

How it works

1. You open a certified contract with a provider (a bank, broker, fund company or insurer) and pay in whatever you choose, up to €6,840 a year.
2. The state pays allowances directly into the contract. You apply through your provider, usually once, by giving it permission to claim them for you every year.
3. You can also claim a tax deduction. The tax office checks automatically whether the deduction is worth more than the allowances. If it is, you get the difference back as a tax refund. The refund is paid to you, not into the contract.
4. The money stays invested until retirement. You can pause your contributions or move to another provider, but you generally can’t withdraw the money early without paying back the subsidies.
5. At retirement, the money is paid out and taxed as income.

Who can use it

• Anyone who pays into the German state pension, which covers almost all employees.
• Civil servants, as with Riester.
• Members of professional pension schemes (berufsständische Versorgungswerke), who are new compared with Riester.
• Self-employed people under 67 who file a tax return, also new compared with Riester.
• A spouse who isn’t eligible in their own right can receive a reduced basic allowance of up to €175 through the eligible partner’s contract.

The allowances

• Minimum contribution: you need to pay in at least €120 a year to receive any allowance.
• Full basic allowance: reached at €1,800 a year (€150 a month), worth €540.
• Full child allowance: reached at just €300 a year, because each child’s allowance is calculated separately on your own contributions.
• Above €1,800 a year: you can keep paying in up to €6,840, but no further allowances are paid on that money.

The design favours small savers and families. A parent of two who pays in €360 a year receives €180 in basic allowance plus €600 in child allowances: €780 from the state on €360 of their own money.

The tax deduction

• What you can deduct: contributions of up to €1,800 a year, plus the allowances you’re entitled to, as special expenses (Sonderausgaben) in your tax return (§ 10a EStG).
• How the check works: the tax office calculates whether the tax saving is larger than the allowances. If it is, you receive the difference as a refund. This is called the Günstigerprüfung.
• Example, at a 42% marginal tax rate: (€1,800 + €540) × 42% = €983 in tax savings. You already received €540 as an allowance, so the extra refund is €443.
• Who benefits: below a marginal rate of roughly 23%, the allowance is worth more and there’s no extra refund. The deduction mainly matters for middle and higher earners.

The product types

• Standard depot (Standarddepot):
• Investments: two funds, one lower-risk and one higher-risk. You decide how to split your money between them; if you don’t, the provider’s default split applies.
• Automatic de-risking: as retirement approaches, the higher-risk share is reduced to at most 50% five years before and at most 30% two years before the payout starts. You can ask for different percentages.
• Costs: effective costs are capped at 1.0% a year. It must be possible to sign up online.
• Public provider: the law also allows the government to set up a public provider for this product.
• Altersvorsorgedepot:
• Investments: a wider choice of investment funds, ETFs and euro government bonds. Either the provider picks the investments, or you choose from the provider’s range if your contract offers that option.
• No guarantee and no legal cost cap.
• Guarantee products: insurance-style contracts that guarantee 80% or 100% of contributions and allowances at the start of the payout. As with any guarantee, the certainty costs returns (see Part 2).

Fees: what’s regulated and what isn’t

How costs are shown: Every provider has to calculate and show its effective costs (Effektivkosten). This is a single percentage showing how much all costs together reduce the annual return until payout. It includes fund costs, account fees and sales costs, and is calculated using the same EU method as the cost figures in investment fund fact sheets. Sample product information sheets are published centrally, which makes it easier to compare offers.

The cap applies only to the standard depot. Its effective costs may not exceed 1.0% a year. The government has confirmed that this is intentional: the standard depot is meant for savers who want a simple default, while those who choose other products accept “their respective cost structures”. In practice, a provider can set any fee level for an Altersvorsorgedepot outside the standard product, as long as it is disclosed.

Sales costs must be spread out. Acquisition and sales costs have to be spread evenly over the whole saving period, unless they are charged as a percentage of each contribution. This means that, unlike with many older contracts, most of your first years’ contributions can’t go to the provider upfront.

Cost increases. A provider that raises its costs must notify you at least four months in advance, and the increase can only take effect at the end of a calendar quarter.

Switching providers. Until the payout starts, you can move your money to another certified contract at any time, with three months’ notice to the end of a quarter:

• Within five years of signing: your old provider may charge up to €150.
• After five years, after a cost increase, or within the same provider: the transfer is free.
• At the new provider: it may not charge acquisition costs on the transferred subsidised capital, only a one-off admin fee of up to €150.
• Timing against a fee increase: the four-month notice for a cost increase is longer than the three-month notice for a switch, so you can leave before higher fees apply.
• No clawback: transfers between certified contracts don’t trigger repayment of allowances or tax relief.

The payout

• When: you choose the start date, normally between 65 and 70. If no date is agreed, payout starts at 65. (Older Riester contracts had different rules: payout from 62, or from 60 for contracts signed before 2012.) It can start earlier only if you start drawing an old-age pension from a statutory system before 65, such as the state pension or a civil-service pension. The depot payout can then start at the same time. In practice, this applies to the state pension’s early-retirement options:
• From 63: after at least 35 years of pension insurance, with a pension reduction of 0.3% for each month before your regular retirement age.
• From 62: for people with a recognised severe disability (Grad der Behinderung of at least 50), after 35 years of insurance, also with reductions.
• How: up to 30% can be taken as a lump sum at the start. The rest is paid monthly, either as a lifelong annuity or through a payout plan that runs until at least age 85.
• Taxes: payouts from subsidised contributions (up to €1,800 a year), the allowances, and the returns on them are fully taxed as income. Payouts from contributions above that are taxed more lightly: if the contract has run for at least 12 years, only half the gain is taxed at your personal rate. If taken as a lifelong annuity, only a fixed share of each payment (the Ertragsanteil) is taxed.

Your options if you already have a Riester contract

1. Keep it as it is. Existing contracts keep their old rules, including the guarantee and the lifelong annuity, until payout. Their old cost rules also continue to apply.
2. Keep it, but switch to the new allowances. You can declare to your provider that the new subsidy rules should apply to your existing contracts. This declaration can’t be undone.
3. Move the money to a new contract, including an Altersvorsorgedepot. The transfer rules above apply, and the allowances you’ve already received don’t have to be paid back.

Watch out: signing any new subsidised contract from 2027 automatically switches all your existing Riester contracts to the new rules, and in some cases your spouse’s as well. Providers have to point this out, but it’s easy to miss.

Whether switching makes sense depends on the contract. Older Riester contracts with high guaranteed interest rates can be worth keeping. Newer, more expensive contracts with low guarantees are more likely candidates for a switch.

What our calculations are based on

I modelled what the Altersvorsorgedepot adds compared with investing the same money on your own. This is a simpler, separate model from the full comparison in Part 5, with a higher budget and the maximum standard-depot costs, so the numbers differ. The detailed analysis is in two posts: Riester 2.0, based on the government draft, and Coming soon to a broker near you: Riester 2.0, updated to the final law. You can test your own numbers with our Altersvorsorgedepot calculator.

Assumptions:

• Budget: €1,000 a month for 30 years, paid at the start of each month.
• Returns: 7% a year before costs.
• Costs: 0.2% a year for a self-managed ETF portfolio; 1.0% a year for the depot (the standard-depot cap).
• Allowances: basic allowance of €540 a year. For the family scenarios, two children at €300 each for 24 years.
• Tax refund: calculated at a 42% marginal tax rate and invested in the ETF portfolio.
• Timing: allowances and tax refunds credited in June of the following year. Credits that would arrive after the 30 years are left out.

The strategies compared:

• ETF only: all €1,000 invested in a low-cost ETF portfolio.
• Maximum depot: the legal maximum of €570 a month (€6,840 a year) in the depot, the rest in ETFs.
• Optimised: only €150 a month in the depot (the amount that earns the full allowance), the rest in ETFs.

What the results show:

• Costs: in the maximum-depot scenario, the 1% annual cost adds up to about €65,000 over 30 years, or about €5,700 in the final year alone.
• Allowances vs costs: above €1,800 a year, the extra contributions earn no allowances but still pay the higher depot costs. That’s why the optimised strategy comes out ahead in both cases.

What the model doesn’t capture:

• Taxes at payout. The figures are pre-tax values. Depot payouts are taxed as income, while ETF gains are taxed under the flat capital gains tax (Abgeltungsteuer), partly exempt for equity funds. Which comes out ahead after tax depends on your income in retirement.
• Other tax rates. At a lower marginal rate, the tax refund is smaller or zero, so the advantage shrinks.
• Cheaper products. A product cheaper than 1% would improve every depot scenario.
• Market risk. Returns are assumed constant. Real markets fluctuate, and the standard depot’s automatic de-risking lowers expected returns in the final years.

What to keep in mind

Costs decide much of the outcome. The allowances are a fixed amount each year, but costs are a percentage of a growing balance and compound for decades. A difference of a few tenths of a percent a year adds up over 30 years. In late 2026, competition among providers looks healthy, but the market hasn’t opened yet, and there’s no guarantee that low prices will last. Before signing, check the effective costs on the product information sheet, and check them again every few years.

It’s a useful addition, not a full solution. The allowances are capped at relatively small amounts, and the full basic allowance is reached at €150 a month. Assume €150 a month for 30 years with full allowances, the returns and costs above, a 20-year payout plan, and 2% annual inflation. That gives a payout of roughly €600 a month in today’s money, before tax. That’s a meaningful top-up, especially for families and lower earners, who get the most generous support. But on its own it won’t close a significant pension gap.

The most reasonable approach: contribute up to the amount that earns the full allowances (€1,800 a year, or €300 a year if the child allowances are what matter most to you), and invest anything beyond that yourself (see Part 5).

If you might leave Germany: if you live outside the EU or EEA when the payout starts, all allowances and tax benefits have to be repaid. The details are in Part 6: Leaving Germany.

Sources

• Product rules, standard depot and cost cap: Altersvorsorgeverträge-Zertifizierungsgesetz (AltZertG)
• Allowances: §§ 83–86 EStG
• Tax deduction: § 10a EStG
• Repayment when leaving the EU/EEA: § 95 EStG
• My analysis: Coming soon to a broker near you: Riester 2.0
• Altersvorsorgedepot calculator

This guide is general information, not personal financial advice. Please read the disclaimer.