Germany’s parliament has replaced the Riester pension with a new investment account.
The Altersvorsorgedepot lets you invest your retirement savings in funds, ETFs, and individual stocks.
The Altersvorsorgedepot starts on January 1, 2027.
The new account also adds a state subsidy worth up to €540 a year.
Why is Germany replacing Riester?
Riester pensions guaranteed your capital was preserved. That forced providers to hold cash and bonds instead of stocks.
Cash-and-bond-heavy portfolios earned weak returns for decades. Fees also stayed high relative to what savers got back.
The Bundestag passed the replacement law on March 27, 2026. Lawmakers call it the Reform of Tax-Subsidized Private Retirement Provision.
CDU/CSU and SPD voted for the law. Die Linke voted against it, while the AfD and Greens abstained.
SPD lawmaker Michael Thews called it a historic milestone. Die Linke wanted that money spent on the state pension instead.
How much money does the state add to your Altersvorsorgedepot?
The Altersvorsorgedepot pays a direct subsidy on top of your own contributions.
Riester’s tax deduction worked differently. The deduction only arrived at tax time, not when you made the contribution.
The Altersvorsorgedepot’s subsidy works as a tiered match:
- 50% match on your first €360 each year, up to €180
- 25% match on contributions from €360.01 to €1,800, up to €360
- Maximum combined subsidy: €540 a year
Parents get a 100% match, up to €300 per child a year. Savers under 25 get a one-time €200 bonus.
You can contribute as little as €120 a year. The maximum is €6,840 a year, or €570 a month.
Only your first €1,800 in contributions earns the match.
Couples can each open an account. It doubled the combined limit to €13,680 a year.
NOTE: A favorability check (Günstigerprüfung) compares the subsidy against a tax deduction. It automatically applies whichever benefit is larger.
Standard Option Caps Total Costs at 1% a Year
The Altersvorsorgedepot offers two ways to invest.
You can pick a standard, ready-made product, or build your own portfolio.
Cost has hurt German retirement products for decades. The new law fixes that with a hard 1% total cost cap on the standard product.
How does the German Pension System work? ->
The standard option automatically shifts from stocks to safer assets as retirement nears.
The cap covers
- account fees
- transaction costs
- fund costs
- distribution costs
Building your own portfolio instead removes the legal cost cap. Fees then depend entirely on your provider’s pricing.
Neobrokers are expected to charge around 0.15% to 0.35% a year. That’s well under the 1% ceiling on the standard product.
Switching providers is also protected. Fees are capped at €150 for the first five years, then free.
Scalable Capital* plans a standard depot with no account fee. It will also waive ETF costs in the first year.
ING, DKB, Consorsbank, comdirect, and Finanzguru are also preparing offerings. Savings banks and cooperative banks are expected to follow.
You can compare the offers from different banks here*.
The Altersvorsorgedepot Drops Riester’s Forced Annuity Rule
Riester forced most savers into a lifelong fixed annuity. The Altersvorsorgedepot drops that rule.
You can choose a flexible withdrawal plan instead. It just needs to last until at least age 85.
You can also switch providers before the payout phase begins. That means you are not locked into one company for life.
Who can use Altersvorsorgedepot?
Riester mainly covered employees and civil servants. The Altersvorsorgedepot opens the door much wider.
Employees, the self-employed, and freelancers can all open one. Everyone gets access to the same state subsidy.
Understand pensions in Germany as a foreigner ->
Your money grows tax-free while you are saving.
Tax applies when you withdraw the money. The amount owed is based on your income tax rate at the time.
Savers Should Wait Until 2027 to Compare Providers
Consider these five steps before the Altersvorsorgedepot launches:
- Wait until 2027 before picking a provider. Fee terms are not final yet.
- Compare the effective annual cost against the 1% cap. Don’t just check the account fee.
- If you have an old Riester contract, decide what to do with it.
- The two systems run in parallel, so nothing forces an immediate switch.
- If you get Kindergeld, factor the child bonus into who opens the account.
NOTE: Providers have until January 1, 2027, to launch compliant products. Fund line-ups and switching terms may still change.
