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Altersvorsorgedepot 2027: What Expats in Germany Need to Know

Can you benefit from Germany’s new retirement investment account if you might leave the country one day?

By Eljas Thranberend, Financial Advisor · Authorised §34d & §34f GewO · 30 September 2026 · 7 min read

The short version

1. The reform has passed. New Altersvorsorgedepot products are due to become available from 1 January 2027.
2. A directly eligible saver paying in 1.800 € per year receives a 540 € basic allowance, plus up to 300 € per eligible child.
3. Eligibility depends on your employment and pension status. A Blue Card or residence permit alone does not establish it.
4. Tax is deferred, not eliminated, and there is no capital guarantee. Money is committed to retirement, usually from age 65 to 70.
5. Residence outside the EU/EEA in the payout phase triggers subsidy-repayment rules. Where you expect to retire belongs in the decision.

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The Altersvorsorgedepot can help eligible expats build retirement savings through government allowances, ETF investments and potential tax benefits. Whether it fits your life depends on when you need the money and where you expect to retire.

The reform has passed, with new products due to become available from 1 January 2027. This guide explains the benefits, limitations and questions to resolve before choosing a contract.

What is an Altersvorsorgedepot?

An Altersvorsorgedepot is a certified investment account designed for retirement, with government allowances and potential tax benefits. It allows investment in eligible funds, including ETFs, without requiring a guarantee that all contributions will be preserved. The investment selection depends on the provider.

Can expats receive the government support?

Many expats working in jobs subject to German statutory pension insurance can qualify. The reform also expands access to qualifying self-employed people and compulsory members of professional pension schemes, including many doctors.

For self-employed applicants, relevant German income and tax-return conditions apply. Professional pension scheme members must meet the required reporting-consent rules.

A Blue Card or residence permit alone does not establish subsidy eligibility.

How much does the government contribute?

For someone directly eligible, the basic annual allowance works in two steps:

First 360 € you pay in

50%

allowance, up to 180 €

Next 1.440 € you pay in

25%

allowance, up to 360 €

At an annual personal contribution of 1.800 €, the basic allowance reaches 540 €. The minimum annual contribution for the allowance is 120 €. An eligible parent can also receive up to 300 € per child, with the full child allowance reached at a personal annual contribution of 300 €.

Your monthly contribution	Your annual contribution	Basic allowance	Child allowance	Total paid into the account
30 €	360 €	180 €	None	540 €
150 €	1.800 €	540 €	None	2.340 €
25 €	300 €	150 €	300 € for one eligible child	750 €
25 €	300 €	150 €	600 € for two eligible children	1.050 €

Illustrative calculations for a directly eligible saver. Child allowances require entitlement and allocation to the relevant parent. Figures exclude investment performance, fees, additional tax relief and later taxation.

What are the benefits of an Altersvorsorgedepot for expats?

Government support can increase the amount invested

Even a modest monthly contribution can receive a meaningful top-up. For an expat family balancing rent, childcare and retirement saving, that may make regular contributions more manageable.

ETFs provide a familiar way to invest

Expats who already understand diversified funds may find this approach easier to assess than a product built around a mandatory capital guarantee. Removing that requirement creates greater investment freedom, though it also transfers more investment risk to the saver.

Tax is deferred during the saving phase

Under the German rules, investment income and gains inside the contract are not taxed during accumulation. Your tax return can also produce additional relief if the deductible contribution and allowance entitlement generate a greater tax benefit than the allowance alone. The allowance is taken into account, so you cannot simply add a full tax deduction benefit on top of it.

Retirement income can be structured in different ways

The reform allows a lifelong annuity or a payout plan running at least to age 85. Up to 30% of the capital can be taken as a lump sum at the beginning of the payout phase.

What are the drawbacks you should understand?

Your money is committed to retirement

The usual payout-start window is age 65 to 70, subject to statutory exceptions and the contract. An early cash withdrawal outside permitted uses generally triggers repayment of the associated allowances and tax advantages.

Investment losses remain possible

A depot without a guarantee can fall below the amount paid in. A market decline shortly before retirement can be particularly uncomfortable if you must start drawing on the investments.

Costs can absorb part of the benefit

The standard depot has a 1% effective annual cost ceiling. This ceiling does not automatically apply to every product in the new market, and it is not a promise that every standard depot will be competitively priced.

Compare the full cost disclosure, including the investments and payout arrangement. Over several decades, ongoing costs can make a substantial difference. “State-supported” alone is not enough to choose a provider.

Tax is postponed, not eliminated

Payouts attributable to subsidised contributions are fully subject to deferred German income taxation, including the contribution component. Payments attributable to unsubsidised contributions follow different rules.

A fixed payout plan can end while you are still alive

A plan ending at 85 provides greater choice over withdrawals, but its payments stop when the plan is exhausted. A lifelong annuity addresses that risk differently. Consider what other reliable income would cover your living costs if you live into your nineties.

What happens if you leave Germany?

The expat-specific question

Your destination and your residence during the payout phase can materially change the outcome.

Under §95 EStG, residence outside the EU/EEA from the payout phase triggers the subsidy-repayment rules. Treaty residence in a third country can also matter, even if you retain an EU/EEA address. This can require repayment of allowances and separately established tax advantages.

For example, someone expecting to retire in India, the United States or the United Kingdom should include that repayment in their assessment. Moving to another EU/EEA country does not, by itself, trigger this specific outside-EU/EEA rule. Other tax and eligibility questions remain.

Leaving during your working life should be assessed separately from withdrawing the money or retiring abroad. Do not assume every departure causes immediate repayment. Before moving, confirm whether you can retain the contract, whether future contributions qualify for support and how your destination treats the account.

Is it better than a regular ETF savings plan?

Neither option is automatically better. An Altersvorsorgedepot offers retirement allowances, while a regular ETF account generally gives you easier access to your investments. The right choice depends on the purpose of the money and the outcome after costs and taxes. Our guide to ETF savings plans in Germany covers the flexible alternative.

Your priority	What to consider
Saving specifically for retirement	The allowance can make the Altersvorsorgedepot worth assessing.
Keeping money available for a move or career change	The retirement withdrawal restrictions may be a poor fit.
Retiring outside the EU/EEA	Include possible subsidy repayment before comparing outcomes.
Building a complete retirement income	Calculate the total saving needed across all pensions and investments.

Common mistakes to avoid

A useful comparison can go wrong if you focus only on the subsidy. Avoid these assumptions:

“Government support means a guaranteed return.”

Your investments can still lose value.

“The allowance and the full tax saving come on top of each other.”

The tax calculation takes the allowance into account.

“I can withdraw the money whenever I leave Germany.”

Early withdrawal and residence abroad are separate issues, each with consequences to check.

“Saving 150 € a month solves my retirement planning.”

That amount maximises the basic allowance, but your retirement needs may require more.

How should you get started?

First, check whether your employment or self-employed status qualifies for support. Then separate money for retirement from savings you may need for a move, a home or a career break.

Compare an outcome where you retire in the EU/EEA with one where you retire elsewhere. Finally, assess the actual provider’s costs, investment options and payout terms. These steps give the advertised subsidy a useful context.

Does the Altersvorsorgedepot fit your plans?

The Altersvorsorgedepot offers meaningful advantages, especially for eligible savers who can commit money to retirement and benefit from the allowances. Its restrictions become more significant when you need flexibility or expect to retire outside the EU/EEA.

At XpatGermany, we help you understand how German retirement options fit your wider financial situation. In a free 15-minute strategy call, we can discuss your plans and identify which questions you should resolve before choosing a product.

Want an English-speaking advisor to handle this for you?

We specialise in expats in Germany. Book your free 15-minute strategy call to see if the Altersvorsorgedepot fits your plans.

Book a free call

Frequently asked questions: Altersvorsorgedepot for expats

Can foreigners open an Altersvorsorgedepot in Germany?

Expats can qualify for government support when they meet the relevant eligibility requirements. Your employment and pension status matter. A residence permit or Blue Card alone does not establish entitlement.

When will the Altersvorsorgedepot be available?

The new products are scheduled to become available from 1 January 2027. Check the actual launch date and terms of the provider you are considering.

How much government support can I receive?

A directly eligible saver contributing 1.800 € per year can receive a basic allowance of 540 €. Eligible parents can also receive up to 300 € per child, subject to the child-allowance conditions.

Is the Altersvorsorgedepot tax-free?

German taxation is deferred during the saving phase. Payouts attributable to subsidised contributions are taxable later, so the account should not be understood as permanently tax-free. Your country of residence can also affect the outcome.

What happens to my Altersvorsorgedepot if I leave Germany?

Check continued eligibility, the provider’s residence rules and taxation in your destination. Residence outside the EU/EEA during the payout phase triggers specific subsidy-repayment rules. A move during working life should be assessed separately from early withdrawal.

Can I withdraw the money before retirement?

Early withdrawals outside permitted uses generally require repayment of the associated allowances and tax advantages. There are specific exceptions, including qualifying housing uses. It should therefore be treated as retirement saving rather than an emergency fund.

Do I need to cancel my existing Riester contract?

No. Existing contracts can continue. Compare current guarantees, costs and allowances before considering a transfer, and distinguish a permitted transfer from cancelling for a cash payout.

Sources and further reading

This article is based on the rules and official guidance reviewed on 29 September 2026. Individual eligibility, provider terms and cross-border taxation require a case-specific assessment.

German Federal Government , reform of private retirement provision
Federal Ministry of Finance , questions and answers on the reform: eligibility, taxation and residence abroad
German Bundestag , adoption of the Altersvorsorgedepot reform, decision of 27 March 2026
§ 93 EStG , use outside the permitted retirement purposes
§ 95 EStG , special repayment cases, including residence outside the EU/EEA

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