Guide · Near retirement

Payout before or after 2027: why the timing decides the form of payout

As of: 25 August 2026 · Reading time approx. 5 minutes · Information, not advice

For savers close to retirement the most important question is not the cost difference but the form of the payout. It depends on which system the payout starts under.

Payout from the Riester contract

At most 30% of the capital as a lump sum at the start.
The rest as a lifelong annuity; for fund and bank savings plans as a drawdown plan with residual annuitisation from 85.
Small annuities can be settled as a lump sum.
The contribution guarantee takes effect at the start of the payout: at least the contributions paid plus allowances are available.

Payout from the Altersvorsorgedepot

Start at 65 at the earliest (transitional rules for older contracts aside).
Choice between a drawdown plan until at least 85, a lifelong annuity or a combination; a lump sum of up to 30% remains possible.
No contribution guarantee in the pure Altersvorsorgedepot; guarantee products with 80 or 100% are a separate product category.
The capital stays invested during the drawdown plan.

What the transfer changes

Anyone who transfers the Riester balance into an Altersvorsorgedepot and starts the payout afterwards is subject to the new payout rules. Anyone who starts the payout before the transfer or before 2027 stays in the Riester logic. A transfer out of a Riester contract already in payout is, according to the available publications, not provided for.

Guarantee versus flexibilityA transfer shortly before retirement trades the Riester contribution guarantee for free payout forms without a guarantee. How much that weighs depends on the market environment at payout and on the ratio of guaranteed value to current balance. Both figures are on the statement.

Tax

In both systems payouts are taxed downstream: as other income at your personal tax rate in retirement. A lump sum is fully taxed in the year of payout; for large amounts the one-fifth rule may apply. This is not changed by the reform.

Quick answers

Can I postpone the payout of my Riester contract?

With most contracts yes, up to a contractually set maximum age. It is in the contract terms.

Does the drawdown plan until 85 also apply to small balances?

For small amounts the rules provide for lump-sum settlements; the thresholds follow the social insurance reference figure.

What you can check now

When does your payout start under the contract, and until when can you defer it?
How high is the guaranteed amount relative to the current balance?
Which payout form do you want, and is it possible in your current contract?

Sources

Retirement Provision Reform Act (Altersvorsorgereformgesetz), Bundestag 27 March 2026, Bundesrat 8 May 2026, promulgated 26 May 2026 (BGBl. 2026 I No. 156)
Federal Ministry of Finance, FAQ on the reform of private pension provision
Provider publications (Allianz, ING, MLP, Union Investment) on implementation, July/August 2026

This page provides general information about statutory rules. It is not legal, tax or investment advice and makes no recommendation for any individual contract. For a personal assessment, consumer advice centres (Verbraucherzentralen) or licensed advisers are the right address – where to get advice.