The PER is a box, according to Bercy. In 3 years, more than 6 million plans have been opened. The principle remains to guarantee you an additional income during your old age. So, how much should you pay to expect a pension worthy of the name? And how much can you expect to earn in retirement? Here are three scenarios to see clearly.
Savings phase: before retirement
Your additional retirement income will depend primarily on the capital saved during your working life. In other words: the duration and the amounts that you will pay into your retirement savings plan (PER). MoneyVox has therefore established 3 scenarios: save a little each month from 30 yearssave more consistently from 40 yearsor many but only from 50 years.
The savings accumulated at retirement will also depend on the return, and therefore on the risk taken… It is impossible to know what will be the most profitable investment in the future! For a PER, risk-taking mainly involves equities, possibly with a dose of real estate funds. Based on the latest study by the French Association for Financial Management (AFG), on the long term, the management piloted by default of the PER makes it possible to hope for annual performance ranging from around 2% to 4% depending on the risk taken. MoneyVox therefore retains three typical scenarios: 1%, 3% or 5% return per year.
Scenario 1: 100 euros per month from age 30
You are 30 years old, with a small financial margin in your monthly budget, and you now want to prepare for your old age. you invest 1000 euros the opening of an individual PER, then you place 100 euros per month… until 65 years. In 35 years of regular savings, you will have amassed 43,000 euros in deposits. If the annual remuneration of your plan is confined to 1%, the gains will remain limited, despite the long-term effort: 8679euros of earnings at the time of your 65 years, or 51679euros of savings for your retirement. For such a long-term investment, the annual return has a very strong influence on the final amount: 76,542 euros with a return of 3%, and 116814 euros for an annual performance of 5%i.e. almost triple the payments!
Note: this simulation is calculated in constant euros, in other words without taking into account the increase in prices over the long term (figures net of inflation). And, to simplify, the estimates are tax-free and without any fees on payment.
The calculations were made using our .
Scenario 2: 300 euros per month from 40 years old
Passed the milestone of quarantine, you decide to open a PER with 5000 euros initial paymentand you immediately program monthly contributions of 300 euros. Result: 95,000 euros in capital towards once you reach the milestone of 65 years. A capital which will have generated few gains in the event of low remuneration (1%): 108,638 euros of savings accumulated in this case, or 13,638 euros of capital gains. A return of 3% makes it possible to hope for savings of 143,845 euros after 25 years of savings, and 193368euros in case of high yield (5%).
Retirement : save by paying less tax. 13 contracts compared
Scenario 3: 1000euros per month 50 years old
Like many savers, you are considering the issue of retirement savings at a late stage… You then decide to put in the resources: 20000euros initial investment on a ddi placement then 1000 euros each month. As the savings horizon is shorter (15 years), the impact of performance remains significant, but we should no longer hope to multiply the capital by two or even three… Verdict: 217,427 euros in retirement savings at age 65 with a return 1% annual, 257,957 euros (3%) or 307482 euros (5%) with superior performance.
| Saver profile | Total payments | Capital accumulated 65 years based on performance | ||
|---|---|---|---|---|
| Weak 1% | mod 3% | up 5% | ||
| Scenario 1: 30 years (100 / month for 35 years) | 43000 | 51679 | 76542 | 116814 |
| Scenario 2: 40 years (300 / month for 25 years) | 95000 | 108638 | 143845 | 193368 |
| Scenario 3: 50 years (1000/month for 15 years) | 200000 | 217427 | 257957 | 307482 |
Aim for long-term performance
Retirement savings is obviously a long-term effort. But whether it’s a significant effort over a limited period, or painstaking work over the long term, the conclusion remains the same: good financial performance will give your payments a whole new dimension! A very long-term investment, coupled with a significant performance, makes it possible to multiply the capital paid.
Annuity phase: retirement age
What additional income can you expect from this savings? In the hypothesis of a retirement age 65and if you choose to immediately convert your plan to a life annuity, here is the monthly income you can expect, using our .
| Monthly pension age 65 | |||
|---|---|---|---|
| After a low yield | Mod yield | High yield | |
| Scenario 1: 30 years (no one in 1992) | 130 | 193 | 295 |
| Scenario 2: 40 years (born in 1982) | 286 | 378 | 509 |
| Scenario 3: 50 years (born in 1972) | 599 | 711 | 847 |
How to read this table. You will find the annuities for the 3 scenarios detailed above. And the level of annuity (excluding fees on the annuity) varies according to the level of financial performance during the savings phase.
Example: the saver who started saving 300 euros per month from the age of 40 (scenario 2) and which benefits from a moderate yield (3%) can touch a monthly pension of 378 euros his 65th birthday.
First observation: the very principle of life annuity, with guaranteed income each month until the end of your life, does not allow you to expect very significant income, but many additional income.
Second observation: the amount of the annuity can easily be compared to the monthly savings effort during your working life, particularly in the case of long-term savings. For simplicity: by saving for an annuity, you get back at retirement roughly what you saved each month… Thus the thirty-year-old saver will receive in all cases, on retirement, a monthly annuity slightly higher than his initial payments. A slight bonus that helps to cushion inflation, between the time he saves and the time he receives the pension.
A different pension according to the age of conversion
However, you still have one lever to play on the amount of your pension: the age at which the savings are converted into a life annuity. In the case of a saver born in 1970 and for a capital of 100,000 eurosthe amount of the annual annuity 60 yearsin 2030, will be 2893euros (i.e. 241euros per month): the conversion rate of the capital in rent is then 2.89%. However, this rate increases if you convert your pension later. Because your life expectancy decreases, and the amount that the insurer must pay you each month can therefore be revised upwards. The conversion rate then goes 3.94% 70 years oldwhich makes it possible to envisage an annuity of 328 euros per month.
| nobody in 1970 | Conversion rate capital into an annual pension | Either a monthly pension for a capital of 100,000 |
|---|---|---|
| Pension at age 60 | 2.893% | 241 |
| Pension at age 65 | 3.337% | 278 |
| Pension 70 years | 3.937% | 328 |
| Pension 75 years | 4.781% | 398 |
| Pension 80 years | 6.036% | 503 |
And for a higher capital, such as 200,000 euros? Simply multiply the amounts in the table above by two: 556 euros of annuity per month for a capital of 200,000 euros converted at 65 years of age, for example. Since the calculation of life annuities is based on life expectancy statistics (or mortality tables), the amounts are obviously likely to change between now and your retirement. However, the legislator requires the insurer to define the mortality parameters in the PER contract. It’s a important point compare to choose between different contracts.
What you must remember
The base retirement savings remains capital accumulation effortcouple a search for performance, during active life. Then, retirement, if you want to improve your pension, it is better as much as possible defer the moment of conversion into an annuity by a few years.
There remains an alternative, made possible by the reform of retirement savings and the new PER: using or even favoring a capital outflow. Knowing that it is also possible to combine the two options: withdraw part of your savings in capital and convert the rest into an annuity. The capital withdrawal is not always the most favorable, fiscally speaking, but staggered withdrawals can make it possible to moderate taxation. Everything will depend on your needs at retirement age.
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