Retirement is generally synonymous with a drop in income. It is therefore important to plan for a supplementary pension to preserve your purchasing power. In this context, the PER is often presented as an excellent solution for maintaining the standard of living of retirees. This savings plan effectively ensures adequate income and reasonable taxes.
What is a PER?
A PER is a retirement savings product launched in 2019, with the aim of replacing traditional retirement savings plans. It essentially aims to improve income and access to rights for retirees. Thus, the disadvantages of PER were limited by the various actors involved. The formula also allows you to benefit from a significant tax reduction on the insured’s assets. Savings come in concrete terms in 3 forms:
- The individual savings plan or PERIN, succeeding the Madelin contract and the Perp (popular retirement savings plan);
- The collective company contract or PERCOL, the new perco (collective retirement savings plan);
- The categorical savings plan or PERCAT, replacing the article 83 contract.
Today, policyholders can still transfer savings from old contracts to the new retirement plan. On the other hand, workers and companies can no longer open new Perp, Perco, Madelin contracts… These different formulas have no longer been offered since 2020. Consequently, it is not really useful to worry about them before working life or at the start of their career. Young people are immediately directed towards the 2019 retirement savings plan.
Pensions: a subject that worries young people
THE PER is now one of the essential solutions to supplement the rights linked to basic retirement plans. This savings is all the more important given the evolution of the system. So, young people are particularly worried about this situation. They also joined the demonstrations against the pension reform project to show their concern on this subject.
Concerning the senior index, the main concern concerns the lengthening of working life. Current students and young workers then risk not being able to benefit from their pensions. They actually have a strong chance of finding themselves in a situation of dependency, after a late retirement. In addition, this change could have a significant impact on the job market, according to the young demonstrators.
More generally, the traditional retirement system has revealed its flaws with the aging of the population. However, INSEE predicts that it will take 1.5 contributors to finance a retiree by 2040, compared to 4 contributors for a senior in 1980. To a certain extent, the reform would make it possible to resolve the problem by compensating for this gap between active and retired people. The measure, however, tends to underestimate other issues, such as the notable drop in income for all profiles.
When should you set up a retirement savings plan?
There is no real ideal age for start saving. The best time is always as early as possible, even at the start of working life. This principle also applies to PER. That said, the tax exemption system is clearly more interesting around the age of 40 or around twenty years before retirement. Indeed, this period involves high taxes due to the importance of income.
The retirement savings plan makes it possible to limit the tax rate, when the salary is at its highest level. Most often, an employee benefits from more comfortable income during the last 20 years of their career. This situation is explained by the positions of responsibility accessible to experienced workers and other advantages linked to seniority. It is therefore important to anticipate the high tax rate associated with substantial resources.
Despite seniority, the income of some workers can remain quite low. Opening a PER risks, in this case, tying up funds that can be useful on a daily basis. For these profiles, it is therefore preferable to open a PER after 50 years. This solution allows you to save in the medium term, without blocking too early liquidity that may be necessary in the face of unforeseen events. Conversely, the PER is not particularly advantageous at the start of a career, but remains a savings.
