Has the retirement savings account already been passed?

Yes. The Bundestag passed the pension reform act on 27 March 2026 and the Bundesrat approved it on 8 May 2026. The act was promulgated in the Federal Law Gazette on 29 May 2026 (BGBl. 2026 I No. 156). The new products may be offered from 1 January 2027. Which providers will offer which terms is not yet known (as of 24 September 2026).

How high is the basic subsidy for the retirement savings account?

For every euro paid in up to 360 € a year the state adds 50 cents, and for every further euro up to 1,800 € a year 25 cents. The basic subsidy is therefore at most 540 € a year. The condition is an own contribution of at least 120 € a year (10 € a month). Contributions above 1,800 € up to the ceiling of 6,840 € are allowed but no longer subsidised.

How does the child subsidy work?

For every child eligible for child benefit there is a subsidy of 1 € per euro paid in, at most 300 € per child and year (for children born after 31 December 2007; 185 € applies to older children). An own contribution of just 25 € a month is enough for the full child subsidy – for each child. With two children, 300 € of own contributions therefore attract 150 € basic subsidy plus 600 € child subsidy. One parent receives the subsidy, usually the one who receives child benefit.

What is the career starter bonus?

Anyone who signs a retirement savings contract before their 25th birthday receives a one-off additional subsidy of 200 €. The calculator credits the bonus in the first savings year if your current age is below 25.

Is there an additional tax benefit?

Yes, via the special-expense deduction. Own contributions up to 1,800 € plus the basic subsidy (at most 2,340 € together) can be claimed in the tax return. In a comparison check the tax office tests whether the tax saving exceeds the subsidy and refunds only the difference. With a marginal tax rate of around 30 % and the full contribution, that is roughly a few hundred euros a year. The calculator shows this amount separately because it goes to your bank account, not into the depot.

When and how is the money paid out?

At the earliest on reaching age 65 (or when drawing a statutory old-age pension early). You can choose a payout plan running at least until age 85 or a lifelong annuity. Up to 30 % of the capital can be withdrawn as a lump sum at the start of the payout phase. Payouts are taxed later at your personal income tax rate.

How high may the costs be?

A cost cap applies to the standard depot: effective costs may be at most 1.0 % a year. Other variants of the retirement savings account are not subject to this cap. Costs compound over decades – 0.5 percentage points lower costs can make a five-figure difference over 30 years. Try it out in the calculator with the cost slider.

Who can open a subsidised retirement savings account?

Directly eligible are, among others, employees subject to statutory pension insurance and civil servants – and now also self-employed people with business or freelance income. Spouses or civil partners of eligible persons can be indirectly subsidised (basic subsidy at most 175 €). Existing Riester contracts are grandfathered; no new Riester contracts can be signed from 2027.

Is the retirement savings account worth it compared with an ETF savings plan?

With small and medium contributions and especially with children, usually yes, because the subsidies make up a large share of the contribution. In return, the money is locked until at least 65 and the payout is fully taxed. A regular ETF savings plan remains available at any time but receives no subsidy. The calculator compares both routes after tax with the same own contribution, return and costs.

Child Subsidy in the Retirement Savings Account: How Families Get 300 € per Child | Retirement Savings Account Calculator

The child subsidy: the reform's strongest lever

With the retirement savings account, which may be offered from 1 January 2027 (pension reform act, BGBl. 2026 I No. 156; as of 24 September 2026), state support for families becomes considerably more generous. The reason is the new child subsidy: for each child eligible for child benefit, the state adds 1 € to every euro saved, up to 300 € per child and year. Hardly any other investment offers a subsidy rate of 100 per cent or more.

How the child subsidy works

1 € per euro saved: the subsidy matches your own contribution, at most 300 € per child and year.
Separately for each child: just 300 € of own contributions a year are enough for the full subsidy – with one child just as with three.
Younger children: the 300 € apply to children born after 31 December 2007. For older children the subsidy is 185 €.
Duration: the subsidy is paid as long as child benefit is paid for the child – usually until 18, in training or university until 25.
One parent: one parent receives the child subsidy, usually the one receiving child benefit.

Worked examples

One child, 25 € a month: 300 € of own contributions a year attract 150 € basic subsidy and 300 € child subsidy. 750 € land in the account – two and a half times your contribution.

Two children, 25 € a month: 150 € basic subsidy plus 600 € child subsidy – 300 € becomes 1,050 €. If a 30-year-old parent saves like this until 67 and the child subsidy is paid for 18 years, subsidies add up to 16,350 € against 11,100 € of own payments. At 6 % return and 0.8 % costs our model gives an account value of around 94,000 €.

One child, 150 € a month: 540 € basic subsidy plus 300 € child subsidy = 840 € a year. The subsidy rate is then just under 47 %. Each euro above 25 € a month only attracts basic subsidy; the child subsidy is already fully used.

What families can take from this

If your budget is tight, plan for at least 25 € a month to collect the full child subsidy. Every euro up to this threshold is exceptionally well subsidised through the basic and child subsidies. If you can save more, at 30 € a month you also reach the end of the 50 per cent tier of the basic subsidy, and at 150 € a month the maximum subsidised amount.

Timing matters too: the child subsidy only runs while child benefit is paid. If you start in 2027 with a ten-year-old, you have about eight years of child subsidy ahead, possibly longer with training. These years cannot be made up later.

And the Early-Start Pension for the child?

The child subsidy goes into the parent's account, not an account for the child. For the children themselves the federal government is planning the Early-Start Pension: 10 € a month from the state for children aged 6 to 18. It has not yet been passed. See what it could deliver with the Early-Start Pension calculator.

Conclusion

For families, the retirement savings account is one of the most heavily subsidised forms of investment there is. With the retirement savings account calculator you set the number of children and the duration of the child subsidy and see immediately how much support adds up. All information without guarantee; model calculations with a constant return.

Child Subsidy in the Retirement Savings Account: How Families Get 300 € per Child

The child subsidy: the reform's strongest lever

How the child subsidy works

Worked examples

What families can take from this

And the Early-Start Pension for the child?

Conclusion

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