Retirement, as long as you are not confronted with it, remains a distant notion… While the unions are up in arms against the Macron government’s reform project, and while Prime Minister Elisabeth Borne is about to unveil the main lines this Tuesday, January 10, you have trouble differentiating between the legal age of departure and the age of the full rate? The BA-ba of vocabulary to remember so as not to be totally lost.
legal retirement age
62 years old, to date, before the reform potentially pushes back this legal retirement age to 64 or 65 years. This legal age is not synonymous with automatic retirement. It is possible to liquidate your rights later (which above all makes it possible to increase the future pension).
Some may claim an early retirement (at age 60 for example): this is the case for several special schemes, but also for workers who can prove a long career (you must at least have started working before your 20s) .
full rate age
The longer you work, the more the pension you will receive in your old age increases: this principle already exists, without waiting for the reform. You have heard of replacement rates and pensions reaching roughly speaking three-quarters of final salary? These orders of magnitude indeed correspond to the official statistics of the DREES (1) but – nuance of importance – for the people having carried out a full career. In short, to hope for a good retirement, it is necessary to aim for the age of the full rate.
To reach this age, you must contribute a given number of quarters. Example, for an employee n in 1973, 172 quarters are necessary to obtain a full pension. If your career is ever incomplete, the full rate automatically applies 67 years old.
As illustrated in the simulation below, taken from the official Info-Retraite simulator, if you started working late, retiring at age 62 can significantly reduce your pension.
Retirement: without the reform, how much will you earn at 62, 64, 65 or 67?
Quarter
To complete a full career, you have to validate terms. And to validate a quarter, you must receive a minimum income over 3 months. In 2023you will have to touch 1690.50 euros gross salary for the validation of a quarter (against 1585.50 euros a year earlier), this amount being revalued at the rate of the rise in the minimum wage.
Retreat : save by paying less tax. 13 contracts compared
Duration of insurance
This contribution period corresponds to the total valid quarters. The period of insurance is the basis for calculating your future pension. The required period of insurance is the period necessary to reach the full rate.
| year of birth | Number of terms required |
|---|---|
| 1955 1957 | 166 quarters (41 years and 6 months) |
| 1958 1960 | 167 quarters (41 years and 9 months) |
| 1961 1963 | 168 quarters (42 years) |
| 1964 1966 | 169 quarters (42 years and 3 months) |
| 1967 1969 | 170 quarters (42 years and 6 months) |
| 1970 1972 | 171 quarters (42 years and 9 months) |
| 1973 or later | 172 quarters (43 years) |
To reach this required duration more quickly, you can buy back non-validated terms (due to studies, insufficient contributions, work abroad, etc.) by paying the contributions not paid during the periods concerned. This therefore allows you to improve your pension… or to retire earlier (by getting closer to the full rate more quickly).
Retirement: quarter redemption, how did it work?
Discount
When you liquidate your pension rights before reaching full pension age, we are talking about a discount. Schematically, the rate applied to your annual income used to calculate your retirement will be lower… and therefore your pension will be lower.
Retirement: a subtlety to receive the full automatic rate of your pension at age 67
Surcharge
On the other hand, if you continue to work afterwards having passed the age of the full rate, a surcharge (definitive increase) increases the amount of your pension, explains Info-Retraite: It depends on the number of additional quarters worked. Once again, it all depends on the age at which you can reach your full rate, which is currently between 62 and 67 years old.
Basic pension
The counting of the quarters concerns above all the basic pension. Except for former civil servants, most of whose pension is a basic pension, the pension of private sector employees is divided into two separate parts: a basic pension + a supplementary one.
The National old-age insurance fund (Cnav) manages the general plan for nearly 15 million withdrawals. The SRE (State Pensions Service) and the CNRACL (National Fund for Local Authority Agents) manage the basic pension of former civil servants, the CNAVPL that of liberals.
According to statistics provided by Agirc-Arrco, the average pension (excluding survivor’s pension following the death of the spouse), of 1474 euros in 2020, includes 732 euros of basic pension, 491 euros paid each month by Agirc-Arrco and 251 euros paid by other schemes for withdrawals having contributed to different schemes during their career.
Agirc-Arrco point (and points for the various supplementary schemes)
The Agirc-Arrco supplementary scheme, that of private sector employees, is the one that concerns the most people, with 13 million withdrawals at present, but the principle of the point is the same for all the supplementary schemes: you contribute throughout of your career and accumulate points. Then these points have a value directly convertible into euros. Warning: the value can potentially vary up or down! The Agirc-Arrco point value is currently 1.3498 euro. For 1000 points accumulated, you are entitled to approximately 1350euros gross annual pension.
Is the complementary totally disconnected from the reform? No, because there is also a discount if you do not reach the full rate age. If the duration of insurance required for the full rate changes, the complementary will therefore be indirectly affected by the reform.
Supplementary retirement: why you should scrupulously check your career statement
Minimum old age
Solidarity allowance for the elderly (ASPA), or minimum old age, climbs 961.08 euros per month for a single withdrawal in 2023. Paid by your pension fund, this allowance is part of the social minima like the RSA.
Minimum pension
The project of a minimum pension 1200euros carried by the government? Please note, this is the contributory minimum, not to be confused with the minimum old age! This minimum pension only concerns withdrawals that have reached the full rate age (and not the legal age). This minimum applies to the basic pension, which cannot be less than approximately 700 euros per month if you meet the conditions. Added to this is the complementary.
Important details: the minimum monthly pension of 1,200 euros mentioned by the government means basic pension + supplementary and gross.
Retirement: amount of the pension, age, quarter… These figures to know before the reform
(1) Department of Research, Evaluation Studies and Statistics.