Whatever the minimum age at which the retirement age will be fixed in the future, the latter will be synonymous with lower incomes.
However, according to Swiss Life's 2021 Freedom of Choice Barometer, financial security comes second among concerns (after autonomy) for the French.
In order to prevent this decline in purchasing power at the end of one's professional career, the Pacte law created the individual PER in 2019. This new product makes it possible to save during working life to obtain capital or an annuity from retirement age.
It replaces the old individual retirement savings products (PERP, Madelin).
The advantages of PER
Launched in October 2019, the PER has been a real success.
At the end of March 2022, more than three million policyholders had already invested in this retirement savings product;
Outstandings at that date reached €37.8 billion according to France Assureurs.
The main reasons for the success of the Individual PER are the flexibility in how it is funded, the possibility of exiting capital - all at once or in installments - and/or as an annuity, but also being able to use the savings acquired with a view to the purchase of the principal residence
"This case of early withdrawal breaks the "tunnel" effect of the old retirement products",
emphasizes Yasmine Molina, Actuarial Manager, Savings & Retirement Products at Swiss Life.
Indeed, unlike life insurance, the funds paid into an individual PER are normally blocked until retirement.
Interesting taxation
Another advantage, and not the least, lies in its taxation.
It is possible to deduct from taxable income the payments made on entry into the PER (within the limits of the fixed ceilings) and thus reduce your income tax for the following year.
“The tax deduction is more interesting on entry for CSP +.
Thus, for an investment of €20,000, the savings effort of an individual subject to a marginal tax bracket (TMI) of 41% will in fact only be €11,800",
explains Yasmine Molina, who precise :
“With this mechanism, the State installs a virtuous circle since it allows the individual, through this advance granted, to seek more performance but also to increase the funds available to finance the real economy.
The particular interest thus serves the general interest.
However
, if the payments were not deducted from taxable income at the start, a tax benefit will be granted when leaving the individual PER.
Managed management makes it possible to boost savings over the long term, by investing in riskier and therefore more profitable assets, when the retirement age is distant and to gradually secure it when the latter approaches.
Annuity or capital?
At the time of retirement, the investor will be able to recover his savings in the form of capital, in one or more instalments, and/or an annuity.
This is the whole point of the individual PER, whereas the old products only offered, with some exceptions, annuity outflows.
The saver can also continue to fund his individual PER, as long as his contract is not completely liquidated.
He can also choose not to use it upon retirement.
"The individual PER is a flexible product at entry and exit, which adapts to individuals and not the other way around",
sums up Yasmine Molina.
Still, the future retiree will have to choose with his adviser the solution best suited to his personal situation and assets.
"
The decision must be taken in good time according to its own plans
,” says Yasmine Molina.