Germany’s 2027 pension reform: Riester and the new depot
From 2027, Germany will offer a new subsidised retirement system with up to €540 in basic allowances, ETF investments and different guarantees. Learn how taxes, existing Riester plans and retiring abroad affect you.
- From 2027, Germany will offer a new subsidised retirement system with up to €540 in basic allowances, ETF investments and different guarantees.
- Learn how taxes, existing Riester plans and retiring abroad affect you.
What if the German government could add up to €540 a year to your retirement savings? From 1 January 2027, a reform will introduce new subsidised private retirement products with access to funds and ETFs and a choice of capital guarantees. It is an opportunity worth understanding—but not a one-size-fits-all solution.
Passed in 2026, the *Altersvorsorgereformgesetz* modernises Germany's subsidised private retirement savings system (*geförderte private Altersvorsorge*). It does not replace the German state pension; it is designed to complement it. If you live in Germany but may eventually retire abroad, some of the details matter even more.
1. What changes in 2027?
The new Altersvorsorgedepot is a certified investment account designed for retirement. It can hold eligible ETFs, funds and other permitted investments, without requiring every product to guarantee the return of contributions. That opens up long-term growth potential, alongside the risk of losses.
Eligibility will also expand to certain self-employed people (*Selbstständige*), freelancers (*Freiberufler*) and business owners (*Gewerbetreibende*). Eligibility is not automatic; personal and tax requirements still apply.
2. How much does the government contribute?
The new Grundzulage (basic state allowance) is linked to your own annual contributions:
- First €360 saved: €0.50 of subsidy for every euro, up to €180.
- Next €1,440: €0.25 per euro, up to another €360.
- At €1,800 in annual personal contributions: up to €540 in basic allowance.
- Kinderzulage: up to €300 per eligible child per year, depending on your contributions and entitlement.
- Minimum personal contribution: €120 per year for the ordinary basic allowance, provided the other criteria are met.
Three practical examples
No children: You contribute €150/month (€1,800/year), receive €540 in basic allowance and put €2,340 a year into the contract.
One eligible child: With the same €150/month, you may receive another €300 for your child: €2,640 a year in contributions and allowances combined.
Two eligible children: You contribute €25/month (€300/year), receive €150 in basic allowance and up to €600 for the children: €1,050 a year in total.
These figures illustrate contributions and government allowances, not investment returns. They assume the person meets all eligibility requirements and is entitled to the child allowances shown.
3. Investment growth or capital protection?
The reform allows different risk profiles:
- Altersvorsorgedepot without a guarantee: potentially more exposure to financial markets, with a risk of capital loss.
- Standarddepot: a simplified standard option with a legal cap of 1% on effective costs; this does not mean all products charge 1%.
- 80% guarantee product: protection for a percentage of contributions and state allowances at the contractually specified point.
- 100% guarantee product: protection of contributions and allowances subject to the legal and contractual terms.
A capital guarantee is not a guaranteed return. Always compare charges, permitted investments and precisely when the guarantee applies.
4. How does taxation work?
Eligible contributions may qualify for a Sonderausgaben (special-expenses) tax deduction. The German tax office (*Finanzamt*) carries out a Günstigerprüfung, comparing the tax benefit with the allowances and granting an additional tax advantage where applicable. You do not receive both benefits in full on top of each other.
Investment gains within the contract benefit from tax deferral during the savings phase. In retirement, payments attributable to subsidised contributions are taxed under the *nachgelagerte Besteuerung* (deferred taxation) rules. Your eventual net outcome also depends on fees, personal taxation and actual investment performance.
5. What if you already have a Riester contract?
Existing Riester contracts benefit from legal protection (*Bestandsschutz*): you do not have to cancel them. Depending on the applicable conditions and requirements, you may keep the old allowance system, opt into the new rules or transfer the accumulated assets to another certified product.
Before switching, review your existing guarantees, charges, child allowances and the possible impact on other contracts held by you or your spouse. A legally permitted transfer does not by itself trigger repayment of previous allowances, but contract terms and fees may apply.
6. When and how can you withdraw the money?
The system is intended for retirement, not unrestricted early access. For new contracts, the normal payout phase generally begins from age 65, subject to statutory exceptions.
Depending on the product, you may choose a lifetime annuity (*Leibrente*) or a scheduled withdrawal plan (*Auszahlplan*) running until at least age 85. An initial lump-sum withdrawal of up to 30% of the capital is also envisaged, subject to the applicable rules. Unauthorised early withdrawals may trigger repayment of government support and tax advantages.
7. Planning to retire in Mexico or another country outside Europe?
This is particularly relevant for expats. Section 95 EStG provides for repayment of allowances and certain tax benefits when the saver resides outside the EU/EEA at the start of the payout phase or during it. Tax residence under a double-taxation treaty may also matter.
This does not mean losing all the money you personally invested. Nor does every move abroad during the accumulation phase automatically lead to immediate repayment. Individual circumstances, possible exceptions and cross-border taxation need careful review.
Someone retiring in Spain may therefore face different consequences from someone planning to return to Mexico, Colombia or Argentina.
8. Is an Altersvorsorgedepot right for you?
Before committing, ask yourself:
1. How much will you need to maintain your lifestyle in retirement?
2. Where do you expect to live once you retire?
3. Which government allowances are you actually eligible for?
4. What level of risk, fees and restrictions on accessing your savings can you accept?
5. Do you already have a Riester, a *BasisRente/Rürup* or regular investments?
A separate occupational disability policy (*Berufsunfähigkeitsversicherung*, BU) may help protect your ability to keep saving. It should not be assumed to be automatically included in an Altersvorsorgedepot.
Your retirement plan should fit your life
At AORAES, we look at retirement planning in the context of your life in Germany and your international plans. That includes comparing subsidised retirement products with more flexible alternatives, such as an ordinary ETF investment, rather than assuming that the highest subsidy always means the best choice.
[Explore AORAES and request a personal financial-planning review](https://www.aoraes.de/).
AORAES — Financial Clarity. Confident Growth.
*Information current as of 15 October 2026. For educational purposes only; not a substitute for personalised financial, tax or legal advice. Final terms depend on the provider and your circumstances.*
Official sources: German Federal Ministry of Finance (BMF) · Deutsche Rentenversicherung · ZfA — FAQs · Section 95 EStG.
Put the information into your own situation.
Check which personal facts, deadlines and conditions are relevant before deciding. A guide explains the framework; it does not replace individual advice.
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Where to verify the information.
- Bundesministerium der Finanzen (BMF)Official sourceFragen und Antworten zur Reform der geförderten privaten Altersvorsorge2026-05-05View original source
- Deutsche RentenversicherungOfficial sourceReform der privaten Altersvorsorge: Bundesrat beschließt Riester-Nachfolge2026-05-08View original source
- Zentrale Zulagenstelle für Altersvermögen (ZfA)Official sourceFAQ: Altersvorsorgereform und RiesterView original source
- Bundesministerium der Justiz und für VerbraucherschutzOfficial sourceEinkommensteuergesetz (EStG), § 95: Sonderfälle der RückzahlungView original source