«"Alexis, I pay too much tax and my future retirement pension is going to be very meager compared to my current income. What can I do to transform my current tax burden into future income?"»
This issue is a daily reality for managers, for self-employed workers and savers that we support at Balmont Conseil. The answer often lies in a tool born from the PACTE law : THE Individual PER (Retirement Savings Plan).
In a strategy of wealth management, The PER is not just a tax-efficient savings vehicle. It's a financial engineering tool that allows you to leverage your marginal tax rate (TMI) to maximize your capitalization. With ALTA, my Augmented Asset Engineer, my mission is to show you how this system integrates into your overall architecture to secure your retirement ambition.
What is an individual PER and how does it work?
THE Individual PER (or PERin; abbr. "Retirement Savings Plan") is a long-term savings product that allows you to build up a supplementary income for the"retirement. It replaced older devices such as the PERP or the contracts Madelin, by harmonizing operating rules and offering unprecedented flexibility.
The tax and asset benefits Why is the PER essential?
L''tax optimization is the main driver of the PER. Its operation is based on a principle of tax deferral, particularly powerful for households in the higher tax brackets.
Tax advantages and deductions upon entry
The major advantage of the PER is the possibility of deducting your contributions from your taxable income.
- Concrete example: A framework whose marginal tax rate is 41. % pays €10,000 into his PER (retirement savings plan). His immediate tax savings are €4,100. The actual savings effort is only €5,900, while €10,000 is working in the financial markets. These tax advantages are the main lever for long-term capital growth.
The deduction limit and specific tax rules
This deduction is limited by a deduction limit annual (approximately 10 % of business income). For the self-employed workers, This ceiling is increased, offering an even greater tax exemption capacity.
Among the tax specifics, Note that if you do not use your entire limit, it can be carried forward to the next three years, offering valuable flexibility for irregular income.
Terms and conditions of membership in the PER
There subscription to a PER is not subject to means testing, but certain conditions of membership in the PER must be respected according to the financial institutions (banks, insurers, brokers).
Transfers between savings plans: Full portability
One of the great successes of the PACTE law is that it has facilitated the transfers between savings schemes.
Lump sum payout or life annuity: The choice of freedom
One of the major advances of the PACTE law is the end of the obligation to take out an annuity, thus offering a real wealth management personalized at the time of departure.
Capital exit
At the'retirement, You can now opt for a capital exit, either in one lump sum or in installments. This is ideal for financing a project (purchase of a second home) or for managing your own withdrawals according to your needs, while controlling the progressive taxation of the capital recovered.
The life annuity
For those who prioritize safety, the life annuity It remains possible. Several options exist to adapt to your family situation:
- Reversible annuity: To protect the surviving spouse.
- Annuity with guaranteed payments: To ensure the payment of a minimum annuity, even in the event of early death.
Cases of early withdrawal: When savings become liquid
- Purchase of primary residence: This is a revolution for young professionals. You can use your retirement savings (voluntary contributions) to finance your down payment. This is one of the tax specifics The most attractive: the money deducted upon entry is used to acquire your home.
- Accidents in life: End of unemployment benefits, disability, death of spouse, over-indebtedness situation, or cessation of activity following judicial liquidation. In these cases of force majeure, the capital is exempt from income tax (only social security contributions on gains are due).
Investment Strategies Managed or self-directed?
Your performance retirement savings depends on'asset allocation. At Balmont Conseil, we help you choose the right level of risk for your profile.
Managed accounting (default)
To protect the saver, the PER offers by default a managed over time. The further you are from retirement, the more savings are invested in stocks (high return potential). As the retirement date approaches, the financial investments are secured towards euro funds or the secure area of the plan.
Free management
For experienced or advised investors, the free management allows you to precisely choose your investment vehicles: unit-linked funds (stocks, bonds), SCPIs (commercial real estate), or trackers (ETFs). This allows a asset diversification much more refined and adapted to economic cycles.
Steps to subscribe to an individual retirement savings plan (PER)
Conduct a wealth and tax assessment
Before any subscription, we analyze your Marginal Tax Rate (MTR). The PER is a powerful lever if you are taxed at 30 %, 41 % or 45 %.
We also assess the balance between your available savings (liquidity) and your locked savings to guarantee your financial security before retirement.
Define the payment strategy
We adjust your contributions according to your cash flow:
- Scheduled payments: To automate your capital accumulation and smooth out the purchase price in volatile markets.
- One-off payments: At the end of the year, to precisely adjust your tax deduction based on your actual income received.
Choosing the right contract
Compare the conditions of membership (initial payment, regular payments) and the technical costs which impact performance: Fees on payment: Deducted from the contract's funding (0% to 5%), Annual management fees: Deducted from the outstanding balance (0.5% to 2%), Arbitration fees: To change the allocation of savings and Transfer fees: If you change schools (often limited).
Optimize and consolidate transfers
If you hold older contracts (Madelin, PERP, Article 83), we analyze the feasibility of a transfer. This allows you to modernize your management, to reduce the costs of obsolete contracts and to benefit from the more flexible capital exit options of the current PER.
Select the management mode
We determine your risk profile to choose the appropriate management strategy:
- Projected management with a long-term horizon: Your capital is automatically secured as retirement age approaches.
- Self-Management: For a tailor-made strategy, where we select specific media together to maximize performance.
Balmont's opinion: Subscribing is just the beginning. A PER (Retirement Savings Plan) must be reviewed annually to adapt to changes in your tax situation and market opportunities.
FAQ Everything you need to know about the Individual Retirement Savings Plan (PER)
The PER, a cornerstone of your future independence
THE Individual PER is much more than a product of'retirement savings ; It's a tax transformation lever that benefits your assets. By combining immediate deduction, long-term capitalization, and flexible withdrawal options, it stands out as the ultimate tool for any saver concerned about their future.
However, its effectiveness depends on precise adjustments: choice of contract, selection of investment vehicles, analysis of conditions of membership in the PER and anticipation of exit taxation. At Balmont Conseil, We combine human expertise with the power of AI to calibrate your strategy according to your overall situation.
Your future should not depend on mandatory schemes. Build your own security.
Alexis Sagnier
With over 17 years of expertise in financial engineering, Alexis Sagnier assists executives and expatriates in securing their cross-border challenges.
