In summary…
The two, in this order: the PER (retirement savings plan) up to the deduction limit, then life insurance for the rest. In the typical case (payment of €12,000 per year for 20 years, return of 3.% per year, calculation assumption), each year the PER saves €4,920 tax (marginal tax bracket of 41 %). CAVEC pensions are high in this case (€78,000 per year): the PER withdrawal encroaches on the 41 % bracket, and the exit tax reaches an average of 36 % instead of 30 %, or €12,118 less than if the bracket remained at 41 %. With the same effort of €12,000 per year, the PER followed by life insurance combination leaves €336,663 net after tax, against €305,091 for life insurance alone, that is €31,572 more. The difference with life insurance remains real, but it is smaller than for a professional with modest pensions, and spreading the payout over 20 years brings it down to an average rate of 30.9%. Life insurance retains its role: it remains accessible, and its gains are taxed at 7.5% after 8 years (under €150,000 in premiums), after an annual allowance of €4,600.
1. What the PER does, step by step
The PER (retirement savings plan) is tax-deductible upon contribution and taxable upon withdrawal. Life insurance works in the opposite way: no tax advantage upon contribution, and reduced taxation on gains upon withdrawal. The entire comparison hinges on the difference between the tax bracket upon contribution and the tax bracket upon withdrawal. The pension amount in this typical case comes from our article on the retirement of a chartered accountant at CAVEC.
| Step | Rule in 2026 |
|---|---|
| Entry: tax saving | Voluntary contributions are deducted from taxable income, unless the taxpayer opts for non-deduction. The savings are equal to the contribution multiplied by the marginal tax bracket: at 41 %, €0.41 per euro paid, at 30 %, €0.30. The 2026 scale applies 41 % from €84,578 to €181,917 of income per share, and 30 % from €29,580 to €84,577 (law no. 2026-103, article 4). |
| Entry: ceiling for a self-employed worker | The higher of two amounts: 10 % of the previous year's profit (withheld up to 8 times the annual social security ceiling) or 10 % of this ceiling, This amounts to a minimum of €4,710 for a payment in 2026. Occupational pension contributions already deducted from the previous year's profit are reduced, except for a portion equal to 15 % of the profit between 1 and 8 times the ceiling. Any unused ceiling can be carried forward to the following five years. |
| Capital withdrawal: contributions deducted | The portion corresponding to the deducted payments is added to other income and is taxed according to the scale, without social security contributions and without the 10 % reduction pensions. She is eligible for the income averaging mechanism for exceptional income. |
| Capital withdrawal: gains | Single flat-rate levy of 31.4% For interest received since January 1, 2026: 12.8% tax and 18.6% social security contributions. The option to apply the standard tax scale remains available. |
| Lump-sum withdrawal: contributions not deducted | If the payment was not deducted, the corresponding portion of capital is exempt from income tax and social security contributions. Only the gains are taxed (31.4 %). |
| Annuity payout: payments deducted | The annuity is taxed as a retirement pension, with a 10% allowance (capped at €4,439 per household for 2025 income). Social security contributions of 18.6% are levied on a portion of the annuity that depends on the age at the first payment: 70% before age 50, 50% from age 50 to 59., 40 % aged 60 to 69, 30 % from age 70. |
| Annuity payout: payments not deducted | The annuity falls under the regime of life annuities for valuable consideration: only a fraction is taxable (70 %, 50 %, 40 % or 30 % depending on the age at the first payment), and social security contributions of 18.6 % apply to it. |
| Withdrawal before retirement | Possible in cases of early release as provided for in Article L. 224-4 of the Monetary and Financial Code. |
Our page Individual PER details how the contract works, and the article on the deduction ceiling and the 2026 finance law details the calculation of the ceiling.
2. What life insurance does after 8 years
| Point | Rule in 2026 |
|---|---|
| Contract of less than 8 years | Gains taxed at 12.8 % (or at the scale by option), without allowance. |
| Contract of 8 years or more: discount | The redeemed gains benefit from an annual allowance of €4,600 for a single person, €9,200 for a couple subject to joint taxation. It is a single agreement for all contracts within the household, does not carry over from one year to the next, and does not affect social security contributions. |
| Contract of 8 years or more: rate | After the initial shock, 7.5% as long as the total of premiums paid and not reimbursed as capital, across all contracts, does not exceed €150,000 as of December 31 of the previous year. Beyond that date, the 7.5% % rate applies only to the portion of earnings equal to €150,000 (less premiums paid before September 27, 2017, that have not been reimbursed) divided by the premiums paid since that date that have not been reimbursed; the remainder is taxed at 12.8% %. The allowance is first applied to the portion taxed at 7.5% %. |
| Social charges | 17.2% on the gains (principle rate). |
| Partial buyout | Only the portion of gains contained in the redemption is taxed: redemption less premiums paid multiplied by redemption divided by the value of the contract. |
| Scale option | Possible, explicitly, comprehensively, and irrevocably. The calculation below does not include it. |
3. The calculation based on a chartered accountant at 41 %
| Calculation assumption | Value retained |
|---|---|
| Chartered Accountant | 47 years old, single (1 share), taxable income of €120,000 before payment: marginal tax bracket at 41 %, and income remains above €84,577 after deduction (€108,000) |
| Payments | €12,000 per year on the PER for 20 years, from age 47 to 67, within the deduction limit (10% of a profit of €120,000), with no other occupational retirement contract deducted from the profit |
| Yield | 3 % per year, net of fees, identical for the PER and for life insurance (calculation assumption), payments at the end of the year |
| Tax saving | Calculated in the year of payment, without delay; it amounts to €4,920 per year (2026 scale, calculation before and after deduction) |
| Scale and rates | The 2026 tax brackets and social security contribution rates remain unchanged until retirement; calculation is based solely on the tax brackets, without any discounts or tax reductions. |
| Retirement at 67 | Pension of €78,000 per year (CAVEC estimate at age 67 for a 35-year career with €120,000 in earnings, including basic and supplementary pension schemes, and a 10% tax allowance (see our article on accountant retirement), with no other income; a 10% tax allowance of €4,439, resulting in €73,561 taxable income and €15,172 in tax before any withdrawal from the PER (Retirement Savings Plan). |
| Capital exit | 10 equal annual withdrawals from age 67 to 76, with no return after age 67 (simplifying assumption that isolates the effect of tax); the income-averaging mechanism is not modeled. |
| Annuity payout | Conversion rate of 4 % of capital at age 67 (calculation assumption) |
| Assurance-vie | Contract of more than 8 years, no other contract in the household, 10 equal annual redemptions from age 67 to 76, social security contributions of 17.2% on gains, rates of 7.5% and 12.8% spread each year according to the remaining premiums |
Typical case
Situation. A 47-year-old chartered accountant, partner in a firm and practicing as a freelancer, single, has €120,000 of taxable income and €12,000 per year to put aside for his retirement until age 67.
Issue. He is hesitating between the PER (Retirement Savings Plan), which reduces his taxes immediately, and life insurance, which remains accessible and whose gains are taxed at a low rate after 8 years. His pension from CAVEC (the pension fund) will be high: the risk is that the PER, withdrawn at age 67, will be taxed in a bracket almost as high as the one at which it was contributed.
Strategy. He compares four investment strategies. Strategy 1: €12,000 per year in life insurance. Strategy 2: €12,000 per year in a PER (French retirement savings plan), of which €4,920 is tax-deductible, resulting in a net cost of €7,080. Strategy 3: this €7,080 invested in life insurance. Strategy 4: €12,000 per year in a PER, with the €4,920 tax-deductible in life insurance, resulting in a net cost of €12,000, the same as Strategy 1. At age 67, he withdraws the capital from the PER over 10 years.
Result. Assembly 4 leaves €336,663 net after tax, versus €305,091 for assembly 1, i.e. €31,572 more with the same effort. The PER alone leaves €210,275 for €7,080 of effort per year, compared to €181,678 for the same amount in life insurance.
Capital at age 67 and exit tax
| Assembly | Net effort per year | Capital at 67 years old | including earnings | Tax and charges on exit | Net after tax |
|---|---|---|---|---|---|
| 1. Life insurance alone | €12,000 | €322,444 | €82,444 | €17,354 | €305,091 |
| 2. PER alone | €7,080 | €322,444 | €82,444 | €112,170 | €210,275 |
| 3. Life insurance alone, same effort as the PER | €7,080 | €190,242 | €48,642 | €8,565 | €181,678 |
| 4. PER, then tax savings through life insurance | €12,000 | €454,647 | €116,247 | €117,984 | €336,663 |
Details of the PER lump sum withdrawal
| Item | Base | Rate | Amount |
|---|---|---|---|
| Payments deducted and withdrawn (scale) | €240,000 | 36 % on average (€11,016 at 30 % and €12,984 at 41 % each year) | €86,282 |
| Withdrawals (single flat-rate deduction) | €82,444 | 31.4% | €25,888 |
| Total at exit | €322,444 | 34.8 % of capital | €112,170 |
Each year of withdrawal adds €24,000 in deducted contributions to the €73,561 of taxable pension. The 30% tax bracket leaves only €11,016 available before reaching €84,577: on each annual withdrawal, €11,016 is taxed at 30% and €12,984 at 41%, totaling €8,628 in tax per year. Spread over 20 years instead of 10 (withdrawals of €12,000), the same withdrawal incurs €74,165 in tax instead of €86,282: an average of 30.9%. The higher the pension, the more spreading it out matters.
What if the pension bracket doesn't decrease at retirement?
The accountant who retains €108,000 of taxable income per year in retirement (fees, rental income) remains at 41 % upon withdrawal. The tax on deducted contributions then rises to €98,400, exactly the savings achieved upon entry, and the PER alone leaves €198,157 compared to €181,678 for life insurance with the same effort, a difference of €16,479. At a difference of €28,597 versus €16,479, The reduction in the retirement bracket costs approximately €12,118. in the result: less than for a professional with a modest pension, because the exit bracket is already close to the entry bracket.
Capital or annuity
| Exit | Gross amount | Taxes and levies | Detail | Portion retained |
|---|---|---|---|---|
| Capital spread over 10 years | €322,444 | €112,170 | €86,282 according to the tax scale on deducted payments, €25,888 flat-rate levy on gains | 65.2% |
| Annuity at 4 % of the capital | €12,898 per year | €5,036 per year | €4,076 in income tax and €960 in social security contributions (18.6 % out of 40 % of the annuity) | 61.0% |
The annuity is added to the €78,000 pension. It is added to a substantial pension and is subject to the 41% tax bracket for a portion: the 10% allowance is already capped at €4,439, and the additional allowance is €0. It is subject to social security contributions on 40% of its amount, which are not levied on the deducted contributions withdrawn as a lump sum. The lump sum therefore retains a larger share of each euro withdrawn (65.2% compared to 61.0%); the annuity provides a lifetime income, which is not subject to any withdrawal rules.
What the €150,000 threshold costs in life insurance
Scheme 1 pays out €240,000 in premiums, above the €150,000 threshold: during the first few years after redemption, a portion of the gains increases to 12.8%. The additional cost of this effect alone is €440 in income tax on the entire withdrawal. In Scheme 4, the life insurance policy receives only €98,400 in premiums: it remains below the threshold, and its gains of €3,380 per year remain below the allowance, therefore without income tax. Only the social security contributions of 17.2 % (€5,814) remain due.
4. The combination for a chartered accountant with high pensions
- The PER first, up to the ceiling. Each euro deducted results in an average tax saving of 41 % (€4,920 for €12,000). The 10 % profit threshold is the starting point: €12,000 for a profit of €120,000.
- The tax savings go into life insurance. The €4,920 collected each year is invested in a contract that remains accessible. With €98,400 in premiums over 20 years, it remains below the €150,000 threshold.
- The capital from the PER is withdrawn over several years. The 30% tax bracket (%) leaves only €11,016 per year of leeway with €73,561 in taxable pensions. Spreading withdrawals over 20 years (of €12,000) instead of 10 reduces the exit tax by €12,118.
- Life insurance is redeemed after 8 years, in small installments. A redemption that contains less than €4,600 in gains (€9,200 for a couple) is not subject to income tax.
- The annuity comes as a supplement, for the portion from which the accountant wants a lifetime income. It is in addition to an already high pension: the annuity portion and the capital portion are settled year by year to keep taxable income as low as possible.
Beyond the limits of the PER (Retirement Savings Plan) and life insurance, real estate takes over: see our pages SCPI and LMNP. The other levers are gathered on the page tax exemption.
Frequently asked questions
Is the PER still better than life insurance for an accountant at 41 %?
From a tax perspective, yes, as long as the withdrawal bracket is not higher than the contribution bracket: in a typical case, the PER (Retirement Savings Plan) yields €210,275 compared to €181,678 for the same contribution level. The difference is smaller than with a modest pension because the withdrawal falls within the 41% tax bracket. Furthermore, the savings are locked until retirement, except in cases of early withdrawal provided for by law: life insurance remains the available reserve.
At what premium level does the 7.5 % rate of life insurance stop?
When the total of premiums paid but not reimbursed as capital exceeds €150,000, across all contracts, on December 31 of the year preceding the redemption, the 7.5% % rate applies only to the portion of gains equal to €150,000 divided by these premiums (assuming no premiums were paid before September 27, 2017); the remainder is taxed at 12.8% %.
Should the PER be withdrawn as a lump sum or as an annuity?
The spread capital retains 65.2% of each euro in the typical case, while the annuity retains 61.0% with a conversion rate of 4%. The annuity is subject to social security contributions on 40% of its amount at age 67. The choice also depends on the need for a lifetime income. The two can be combined: the PER allows for a lump sum, an annuity, or both.
What happens if I don't deduct my PER contributions?
There are no savings on the initial investment, but upon withdrawal as a lump sum, the portion corresponding to the undeducted contributions is exempt from income tax and social security contributions. Only the gains are taxed, at a flat rate of 31.4%. This option makes sense when the initial tax bracket is low.
Does the €4,600 allowance for life insurance apply to social security contributions?
No. It only reduces the base subject to income tax. The social security contributions of 17.2% (%) are levied on the entirety of the earnings.
Our position
We start with your profit, your deduction limit, your retirement age, and your expected retirement income bracket. Then, we work with you to determine the allocation between your retirement savings plan (PER) and life insurance, as well as your withdrawal schedule. We receive commissions on contracts taken out through our firm.
Book an exchange with Balmont Conseil
Alexis Sagnier, financial and real estate investment advisor, insurance broker, AMF certified. ORIAS 13003497. Updated on 28/10/2026.
Official sources consulted
- Official Bulletin of Public Finances (BOFiP), BOI-IR-BASE-20-50-20, limits on the deduction of contributions and retirement savings premiums (ceiling for a self-employed worker, carry-forward over five years): bofip.impots.gouv.fr
- BOFiP, BOI-RSA-PENS-30-10-20, Capital retirement benefits (withdrawal from the capital retirement savings plan, deducted and non-deducted contributions, gains, quotient), version of February 17, 2026: bofip.impots.gouv.fr
- BOFiP, BOI-ANNX-000513, summary of the taxation regime for retirement savings plans (annuity payout), version of February 17, 2026: bofip.impots.gouv.fr
- Service-public.gouv.fr, «Retirement savings plan (PER): taxation upon withdrawal» (capital, annuity, flat-rate levy of 31.4 %, taxable portions), verified on October 12, 2026: service-public.gouv.fr
- Service-public.gouv.fr, «Life insurance: taxation of redemptions» (allowance of €4,600 and €9,200, rate of 7.5% and 12.8%, threshold of €150,000, social security contributions of 17.2%), verified on April 15, 2026: service-public.gouv.fr
- Directorate General of Public Finances, "How are the proceeds of life insurance contracts taxed since January 1, 2018?", updated on March 20, 2026: impots.gouv.fr
- BOFiP, BOI-RPPM-RCM-20-15, rate of 12.8 % and reduced rate of 7.5 % (threshold of €150,000 and method of distributing gains): bofip.impots.gouv.fr
- BOFiP, BOI-RPPM-RCM-20-10-20-50, life insurance contract products (partial redemption, annual allowance, order of allocation): bofip.impots.gouv.fr
- Service-public.gouv.fr, «Social security contributions on income from assets and investments» (2026 rate: 18.6 % in general, 17.2 % for life insurance; law no. 2025-1403, article 12): service-public.gouv.fr
- Service-public.gouv.fr, «Income tax: tax brackets and rates 2026» (scale per share, law no. 2026-103 of February 19, 2026): service-public.gouv.fr
- Service-public.gouv.fr, «Declaring retirement pensions» (10% allowance capped at €4,439 per household for 2025 income), verified on April 15, 2026: service-public.gouv.fr
- Directorate General of Public Finances, practical brochure on income tax, "Pensions, retirement benefits and annuities" (retirement savings plan annuities, taxable portions of purchased life annuities): impots.gouv.fr
- Pension fund for chartered accountants and auditors (CAVEC), annual retirement and insurance guide: cavec.fr
Read also
- What pension will a self-employed chartered accountant receive at CAVEC in 2026, and how much is missing?
- Individual PER: operation and ceiling
- PER: Deduction ceiling and 2026 finance law
- Tax optimization: all the solutions
- SCPI: operation and taxation
- Non-professional furnished rental (LMNP): how it works
