In Summary
| 📖 Section | Description |
|---|---|
| 🌟 Introduction | The Retirement Savings Plan (PER) is a long-term savings scheme introduced by the PACTE Law of 2019, aimed at encouraging the French to prepare for their retirement. It offers tax advantages, management flexibility, and the possibility of early withdrawal. |
| 🧐 What is the PER? | The PER is a long-term savings plan that allows the accumulation of supplementary income for retirement. It carries a risk of capital loss but remains accessible to everyone. |
| 🙋 The Individual PER | Accessible to all individuals, regardless of professional situation, allowing voluntary contributions at your own pace. |
| 💰 Tax Advantages | Contributions to a PER are deductible from taxable income, offering significant tax benefits. |
| 🔄 Contribution Flexibility | Provides the option to choose between free or scheduled contributions, and is compatible with other savings products. |
| 🛡️ Protection for Your Loved Ones | In the event of death, funds are paid to registered beneficiaries, providing financial protection. |
| 🔓 Withdrawal for Important Moments | Allows for the withdrawal of funds for significant events, such as purchasing a primary residence. |
| 🧮 Taxation of the PER | Contributions are deductible from taxable income. Taxation upon withdrawal depends on whether contributions were deducted (subject to income tax and flat tax) or not (exemption on capital and interest taxed at flat tax). |
| 🎚️ Management Modes of the PER | Two options: Free Management for complete autonomy in investments, or Managed Horizon Management, where management is delegated to professionals. |
| 🔓 Withdrawal of the PER | Early withdrawal possible in cases of death, disability, over-indebtedness, unemployment, cessation of non-salaried activity, or purchase of a primary residence. |
| 🗝️ Retrieving Your Savings at Retirement | At retirement, funds can be withdrawn as a lump sum, lifetime annuity, or a combination of both. |
| 🔁 Transfer of Old Contracts | Allows transferring accrued rights from old retirement savings plans (PERP, Madelin, PERCO) to the PER, requiring a detailed analysis of your situation. |
| 🏁 Conclusion | The PER is a flexible and advantageous solution for retirement planning, adapting to your needs with diversified tax and management options. |
The Retirement Savings Plan (PER) is a long-term savings scheme designed to help you prepare for your retirement. Created by the Pacte Law of 2019, the PER aims to encourage the French to save for a income supplement during retirement. Accessible to all, it offers tax benefits, great management flexibility, and the possibility of early withdrawal for important moments such as purchasing a primary residence. Discover why and how this plan can fit into your retirement savings strategy.
What is the Retirement Savings Plan (PER)?
The Retirement Savings Plan (PER) is a long-term savings scheme designed to help you prepare for your retirement. Implemented following the adoption of the Pacte Law of 2019, this plan aims to encourage the French to save for their supplementary retirement in addition to mandatory schemes. However, it presents a risk of capital loss. By gradually building up a income supplement, the PER allows you to have an accessible savings pool upon retirement.
The Individual PER
The individual PER is accessible to everyone, regardless of your professional situation. Whether you are a private sector employee, civil servant, self-employed worker, or job seeker, this plan allows you to make voluntary contributions at your own rhythm.
Why Open a PER?
Tax Benefits
Contributions made to a PER are deductible from your taxable income, providing you with a favorable tax situation. By reducing your taxable income, you benefit from a significant tax reduction.
Contribution Flexibility
With the PER, you can choose between free or scheduled contributions, allowing you to save according to your financial capacity. You can also subscribe to other savings products such as life insurance in parallel.
Flexible Withdrawal
Unlike previous schemes, the PER offers you the freedom to choose your method of withdrawal. You can opt for a lump sum payout, an annuity, or a combination of both.
Protection for Your Loved Ones
In case of death, the funds are paid to registered beneficiaries, providing financial protection to your loved ones.
Availability for Important Moments
The PER allows you to unlock funds for significant events such as purchasing your primary residence.
Taxation of the PER
Deduction of Contributions
Voluntary contributions to a PER are deductible from your taxable income, up to a global ceiling set for each tax household.
Taxation at Withdrawal
Lump Sum Withdrawal
- Deductible Contributions: The portion corresponding to voluntary contributions will be taxed according to the progressive income tax scale. Interests and capital gains will be subject to the Flat Tax of 30%.
- Non-Deductible Contributions: The portion corresponding to voluntary contributions is tax-exempt, while interest and capital gains are taxed at the Flat Tax of 30%.
Annuity Withdrawal
- Deductible Contributions: The annuity is taxed according to the income tax scale after a 10% allowance and is subject to social contributions of 17.2%.
- Non-Deductible Contributions: The annuity is taxed according to the progressive income tax scale and is subject to social contributions according to the rules of life annuities for consideration.
Management Modes of the PER
Free Management
You have the option to invest in a range of supports, from the most secure (euro funds) to the most dynamic (unit-linked funds). This management style allows you to control your investments entirely.
Managed Horizon Management
You can delegate the management of your PER to professionals, who will adjust your investments based on your profile and your retirement departure date. This management aims to gradually secure your savings as you approach retirement.
Withdrawal of the PER
Cases of Early Withdrawal
The PER allows early withdrawal in the following cases:
- Death of the spouse or PACS partner
- Disability of the holder, spouse, PACS partner, or children
- Over-indebtedness of the holder
- Expiration of unemployment rights
- Ceasing of non-salaried activity following a bankruptcy
- Acquisition of the primary residence
Retrieving Your Savings at Retirement
At retirement, you can unlock your funds in the form of:
- Lump sum, in one or several installments
- Lifetime annuity, paid periodically
- Combination of both
Transfer of Old Contracts
You can transfer rights accrued under previous retirement savings schemes (PERP, Madelin, PERCO) to your PER. This process requires a detailed analysis of your contract and situation.
The transfer of old contracts to the PER offers several advantages and requires consideration of various modalities:
Advantages of Transfer
- Simplification of Management: By transferring your old contracts to a PER, you consolidate your savings in a single scheme. This simplifies investment management and provides a clear overview of your retirement savings.
- Flexibility of Exit: Unlike old contracts that often limited exit options, the PER allows a lump sum, a rente, or a combination of both, offering greater flexibility to meet your financial needs at retirement.
- Tax Optimization: The PER offers attractive tax benefits, especially the deductibility of voluntary contributions from taxable income, within legal limits. By consolidating your savings, you can maximize these tax advantages.
Transfer Procedures
The process of transferring old contracts to a PER must be carefully planned and executed. Here are the key steps:
-
Assessment of Your Situation: Before proceeding with the transfer, it is essential to perform a detailed analysis of your financial situation and retirement goals. Consult a financial advisor to evaluate the benefits and drawbacks of transferring each type of contract.
-
Assessment of Fees: Some old contracts may impose transfer fees. It is crucial to be aware of these fees to avoid surprises and determine if the transfer is financially advantageous.
-
Compare Conditions: Compare the terms of old contracts with those of the PER. Ensure that the PER offers investment options and exit conditions that meet your needs.
-
Transfer Procedure: Once the decision to transfer is made, follow the transfer process with your retirement savings manager. Provide the necessary documents and follow instructions to ensure a smooth transfer.
Points to Watch Out For
- Holding Period: If your old contracts have been held for more than 10 years, the transfer must be made free of charge. For contracts held for less than 10 years, transfer fees may apply, but they should not exceed 1% of the transferred amount.
- Tax Impact: Consider the tax impact of the transfer, especially if you have benefited from tax deductions on contributions to old contracts. These aspects should be considered in your overall retirement savings strategy.
Three Management Modes for the Retirement Savings Plan
The retirement savings plan (PER) offers various management options to meet the needs and profiles of different investors. Among these, the MIF’s PER stands out for its flexibility and accessibility. You should, however, ask yourself: how does the MIF PER work?
- The MIF, created nearly 150 years ago to manage railway workers’ retirement savings, has since 2006 opened to all.
- With exclusive remote marketing, it offers simple and accessible products and solutions, suited for those with limited financial expertise.
- The MIF PER notably offers three distinct management modes.
Horizon management is the delegated investment, where funds are allocated to minimize risks as retirement approaches. It is suitable for those seeking a secure approach. Mandate management, or profile-based investment, offers asset allocation according to a risk profile chosen, whether conservative, balanced, or dynamic. It provides a balance between security and performance. Self-management, or autonomous investment, offers complete freedom in selecting investment supports. This mode is aimed at savvy savers who want to fully control their investment strategy.
The MIF PER proves to be a flexible and accessible solution, offering a range of options for tailored retirement savings, aligned with the needs and skills of each saver.
Conclusion
The Retirement Savings Plan (PER) is a flexible and advantageous solution to prepare for your retirement. With tax benefits, diverse management options, and the ability to unlock funds for important moments, the PER adapts to your needs. Don’t hesitate to consult your advisor to optimize your savings and ensure a peaceful retirement.
For Further Information
