Redeeming quarters is a risky bet! The earlier you buy them back, the less expensive they are… But the earlier you buy them back, the more you risk that this payment will be rendered useless when it comes time to count for retirement. This is the case of Philippe, caught by the probable postponement of the legal starting age from 62 to 64 years.
Question from Philippe, January 16, 2023
N in 1966, I had to retire at age 65 to get the full rate. I bought 12 terms of higher education for 75,000 euros in order to be able to leave at 62. I lost this money?
Before answering you, Philippe, a quick reminder of how quarter redemption works is in order. He is actually possible to buy back up to 12 quarters (so 3 years) for years of higher education. Why is it so expensive? the redemption cost depends only on age and income level that you have when you make this request, explains Pascale Gauthier, partner at Novelvy Retraite. And of the option chosen: for the rate, or for the rate and the duration of the insurance. In this case, Philippe, given the price quoted, you seem to have redeemed at the maximum costsince it corresponds to price ceiling your age for a repurchase relating both to rate and term of insurance. This option allows you both to get closer to the full rate more quickly but also to increase the number of quarters counted in the duration of the insurance: in short, the most expensive option because it is the one that most strongly improves the calculation of your future pension.
Retirement: buying back quarters, is it useful and how much?
Will this redemption be useless if the pension reform is adopted? With this redemption I left 62 years full rate but … if I have to leave 63 or 64, what will have served that I redeem my quarters?, you said, Philippe, during a new exchange with the editorial staff. Indeed, for your 1966 generation, the legal age would be 63 years and 6 months if the reform is adopted as it stands… effectively making the purchase of half of the 12 quarters useless. Knowing, however, that the reform still forces you to work 3 more quarters, which would reduce the number of redemptions lost 3 quarters.
At what age can I retire? *
| Legal retirement age ** | — |
| Number of terms required ** | — |
| automatic full rate ** | 67 years old |
* From 1er September 2023, the legal retirement age will be gradually raised by three months a year to reach 64 in 2030, compared to 62 today.
** Source: government pension reform project presented on January 10, 2023.
NB: This is a simplified simulator which presents the general cases. For a personalized simulation, go to the simulator of the retirement info site.
For redemptions, wait until you are sure you need them!
The quarters thus unnecessarily redeemed will they give me a premium?, you add, the premium being a permanent increase in the pension when you work after the age of the full rate. Unfortunately not, as Pascale Gauthier, from Novelvy Retraite, explains: No, because the premium only kicks in when you work after you have passed the legal age. The premium is really conditional on the fact of contributing while working after the legal age and after the age of the full rate. So a purchase before age does not affect this premium.
Hence this advice from Pascale Gauthier to other readers tempted by redemption: For redemptions, or rather retirement payments, I repeat: wait until you are sure you need it! A reform that is actually part of the events that can make a redemption obsolete…
Will they be reimbursed?
In fact, if the redemption of certain quarters turns out to be totally useless, the only benefit that this operation will have brought you will be of a tax nature: because the sums thus paid for the redemption of quarters are deductible from taxable income.
Finally, Philippe, you ask one last additional question: the quarters unnecessarily redeemed will they be refunded? Relevant question since there is a precedent. When the legal age was pushed back from 60 to 62, in 2010the Minister of Labor at the time Eric Woerth ended up promising: Many people will not need these quarters [rachets]and therefore we will reimburse them, which is quite normal.
The implementation of this promise was however delicate since this refund had a tax consequence: the refund inflated the taxable income, in order to offset the initial deduction. Will such a refund be implemented? Response during parliamentary debates… knowing that the very principle of postponing the legal age remains to be voted on.
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