Advertorial — The PER or Retirement Savings Plan is a long-term savings product intended for retirement. Introduced in 2019, it aims to offer individuals a flexible savings solution open to all. It is widely adopted due to its favorable tax regime. But how does the Retirement Savings Plan work? How is it an asset for your retirement?
What is PER and how does it work?
The PER is a retirement savings product intended for individuals. You are free to choose the type of payment and the type of output.
Types of payment
The PACTE law of 2019 created the PER by replacing existing savings products:
- Individual PER or PERIN : open to all and replaces the PERP and the Madelin contract,
- collective PER or PERCOL : accessible to all employees and replaces the PERCO,
- Mandatory PER or PERCAT : open to certain categories of company employees and replaces the article 83 contract.
Exit arrangements
In principle, savings are blocked until the day of retirement. You then have the choice between these types of outputs:
- Capital outflow: recovery of all savings in the form of capital,
- Leaving an annuity: periodic payments until the death of the PER holder,
- Combination of the two outputs.
However, early exit is possible in the following cases:
- Accidents of life: disability of the holder, spouse or child, death of the spouse, expiration of unemployment rights, over-indebtedness, judicial liquidation of a self-employed activity
- Acquisition of a main residence.
What is the taxation of the Retirement Savings Plan?
PER taxation is particularly advantageous for savers. Upon entry, they have the option of deducting the payments from their taxable income or not.
Deduction of payments
The taxation regime for this option depends on the type of exit. In the case of an annuity, the annuity paid at the time of release of the PER is subject to income tax. A reduction of 10% is deducted from the amount of the pension. The share of the annuity is subject to social security contributions.
In the case of a capital outflow, the capital corresponding to the voluntary payments is taxed at progressive income tax scale. But it is not taxed on social security contributions.
Non-deduction of payments
In the event of an annuity, the annuity is subject to income tax, according to the rules applicable to life annuities for consideration. The reduction takes your age into account:
- Under 50 years old: 30%,
- 50 to 59 years old: 50%,
- 60 to 69 years old: 60%,
- Over 69 years old: 70%.
In the event of a capital outflow, the capital is exempt from income tax and social security contributions. Interest generated by the capital share PER undergo a flat rate deduction of 30%.
What are the advantages of PER?
THE PER offers several advantages:
- Advantageous taxation: low tax rate and possibility of opting or not for tax exemption,
- Possibility of transfer: your old retirement savings contracts can be transferred to a single PER,
- Flexibility of output modes: the different types of exits each have their advantage,
- Protection against the hazards of life: early release is authorized in 6 cases,
- Choice of management mode: managed management, retirement horizon management or free management.
The PER for a peaceful retirement
THEPER represents a simple and flexible retirement savings solution. Its advantageous tax regime ensures tax optimization. However, the final return will depend on the amount invested, the duration of the savings plan and the options chosen. The PER is therefore an asset for preparing for your retirement with peace of mind, so make the right choices!
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