Do you want to invest in a PER? Whether you’re looking to reduce your 2023 taxes or block savings until you retire, here are 3 questions you should ask yourself before opening a PER.
1 are you taxable?
This is THE question that you must ask yourself before depositing your savings in a retirement savings plan (PER)! A non-taxable household obviously also has an interest in putting money aside for retirement, if it can. But in this case he has no not necessarily in the interest of placing this savings on a blocked product until retirement, since the money saved on a PER can only be released before retirement in the event of an accident in life (over-indebtedness, disability, etc.) or in the event of the acquisition of the main residence. If you are not taxable, other less restrictive products (life insurance, booklets, PEA, etc.) exist.
If you are taxablethe PER not only has the advantage of allowing you to save for retirement but also of reduce your income tax. Each amount placed on a PER in 2022 is deductible from your taxable income 2022. For what tax benefit? There, everything depends on your level of taxation. Clear, the more you are taxed, the more interesting the deduction: it will be much more significant for those who appear in the upper brackets of the income tax scale (30% 45%) than for low-income taxpayers who appear in the 11% bracket. To find out what your bracket is (we talk about marginal tax rate, or MTR), you can use the tax simulator or the MoneyVox investment calculator.
More concretely, 1000 euros placed on a PER at the end of the year will reduce your taxable income in 2022 by 1000 euros, which will reduce your tax payable in 2023 by 110 euros in tax. (1) if you are in the 11% bracket, and 450 euros if you are in the 45% bracket. Wealth management advisers and other tax exemption experts generally advise the PER to taxpayers in the 30%, 41% or 45% brackets.
To know: if you are not taxable or not taxed but you absolutely want to invest on a PER, you can claim the non-deductibility of your payments. This option will offer you a lower tax rate when withdrawing your savings at retirement age.
Retirement savings: how to reduce your taxes with the PER
2 How much can you detax on a PER?
If you have just received a large sum, as an inheritance or after having returned a property, do not necessarily be in a hurry to invest everything at once in a PER! On the one hand, since it is certainly wiser not to put all your eggs in one basket. But above all because tax-deductible retirement savings payments are capped each year. This ceiling is personalized: it corresponds to 10% of your annual income, up to a maximum limit of 32,909 euros in 2022, this limit being however much higher for self-employed workers (2). Additional clarification: this annual ceiling is cumulative over several years.
Retirement savings: how much can you deduct from your taxable income?
Complicated A very simple tip: take your 2022 tax notice. Look at the calculation details, from page 2, and aim for it. retirement savings ceiling sectionjust before the heading withholding tax 2022. There is the unused ceiling for the last three years, cumulative, that of the year 2021, and your ceiling for contributions paid in 2022. If you exceed this amount for your voluntary contributions to a PER, anything over that will not be deducted from your taxable income.
Tax notice: the keys to understanding your 2022 taxes
Retirement : save by paying less tax. 13 contracts compared
3 What should be looked at in the PER contract?
The first thing to scrutinize in the general conditions of a PER before signing is the fee level. Are there deposit fees, which eat into your savings each time you deposit? Are the annual management fees high (they range from 0.5% to 2% depending on the contract)? Do option or arbitrage fees add too much to the annual fee?
Thanks to the summary table of costs available since June 1 of this year, you have direct online access to the entry fees and the annual and one-off costs of your contract.
Retirement savings plan: the costs that must be successfully compared
Then look at the options and supports available, so that it meets your needs. A PER offering free management with several hundred units of account is not useful for an unsophisticated saver. If you are looking for a simple product, the editorial staff has compiled a list of PERs suitable for beginners.
You should also be aware, with regard to management options, that any PER must at least offer horizon management profiles, prudent, balanced or dynamic standard distributions which provide for the securing of savings as retirement approaches. And some PER also offer more sophisticated pilot management.
Compare the best Retirement Savings Plan offers
(1) Excluding discount.
(2) 76,100 euros maximum for self-employed workers (TNS).