Frühstart-Rente (Early Start Pension)

The Frühstart-Rente is a new government-backed program aimed at helping the next generation build long-term private wealth. The state automatically deposits €10 every month into an Altersvorsorgedepot for eligible children starting at age 6 until they turn 18.

Crucial Nuances - Due to federal budget constraints, initial enrollment is restricted to children who turn 6 years old in the starting year, with plans to expand cohorts gradually. - The state contributions stop at age 18. The young adult then takes full ownership of the account and can leave the funds compounding in equity index funds (ETFs) or withdraw them penalty-free only for purchasing an owner-occupied primary residence (Eigenheimrente). Withdrawing for education or other purposes triggers 'harmful use' (schädliche Verwendung), requiring full repayment of state subsidies and immediate taxation of all capital gains.

Real-World Example Sophie's daughter Emma turns 6 in 2026 and is enrolled in Frühstart-Rente. The German government deposits €10/month into Emma's Altersvorsorgedepot until she turns 18, totaling €1,440 in state contributions (€10 × 12 months × 12 years). The funds are invested in a low-cost global equity ETF averaging 7% annual returns. By age 18, the account grows to approximately €2,280. If Emma leaves the funds invested without additional contributions until age 67 (49 more years), the €2,280 compounds to approximately €78,000, providing a solid retirement foundation funded entirely by the state.