The Retirement Investment Account (AVD) is Germany's new government-certified private pension scheme, launching on 1 January 2027. It replaces the Riester Pension and combines government grants with modern ETF investments.
Unlike the old Riester Pension, there is no mandatory capital guarantee, lower costs, and a significantly more attractive grant structure. Contributions of up to €6,840 per year are tax-deductible, and growth is tax-free.
Government-managed account with pre-configured ETFs. Costs capped at 1% p.a. Ideal for beginners who don't want active portfolio management.
Provider-managed account with free ETF selection. Greater flexibility, potentially higher costs. Suited for experienced investors.
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Employees
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Civil servants
Feature
Riester Pension (old)
Retirement Investment Account (new)
Basic allowance
€175/year (flat)
Up to €540/year (tiered)
Child allowance
€300/child
€300/child
ETF investment
❌ Not allowed
✅ Fully available
~2% p.a.
1.0% p.a. (Standard Account)
Self-employed
✅ Eligible
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2001
1 January 2027
From the start of retirement (earliest at age 62) you can choose from three options: a monthly pension (annuity), a phased withdrawal plan, or a combination of lump-sum payout and pension. All payouts are taxed at your personal income tax rate.
All persons subject to unlimited tax liability in Germany: employees, self-employed, freelancers, and civil servants.
From 1 January 2027 at certified providers.
Yes, from 2027 existing Riester contracts can be transferred to an AVD free of charge.
Up to €540 per year — tiered according to the level of your own contributions.
No — unlike the Riester Pension, no contribution guarantee is required. You can choose between 0%, 80%, or 100%.
At your personal income tax rate in retirement (deferred taxation).
A maximum of 1.0% p.a. on assets under management — a statutory cost cap.
Contributions can be paused or adjusted at any time. The grant is calculated based on actual deposits.
