Opening a PER when you retire? Not such a bad idea!

Once you reach retirement age, you can certainly take advantage of the PER’s key tax benefit to reduce your taxable income.

The Retirement Savings Plan (PER) is a retirement savings plan that has been available since 2019. It allows subscribers to build up savings during their working lives and then benefit from the accumulated amounts in the form of a lifetime annuity, a lump sum, or a combination of both. Funds invested in a PER are, in principle, locked into the plan until the insured person actually retires. There are only six circumstances under which funds may be withdrawn early: excessive debt; the purchase of a primary residence; the expiration of unemployment benefits; the cessation of self-employment; a disability classified as Category 2 or 3; or the death of the policyholder’s spouse. 

Although it is marketed as a savings product designed to help people prepare for retirement, there is no legal age limit for opening an account. However, some insurers impose an age limit for making contributions and/or opening an account. But is opening a PER account after retirement really a good idea?
 

Once you reach retirement age, you can certainly take advantage of the PER’s key tax benefit to reduce your taxable income. And for good reason: there is no age limit—barring any contractual provisions—on the deductibility of contributions. If you have no earned income, the annual deduction limit is indeed 4,114 euros. This limit can be carried forward for three years if you haven’t used it in previous years. 

Opening a PER upon retirement is therefore still a good idea, especially if you’re still paying a lot of taxes. This may be the case if you’re working while receiving a pension, for example, or if you have additional property income. If your marginal tax rate (TMI)—that is, the rate applied to the highest portion of your income—is 30% or 41%, the PER is indeed a good option. As a reminder, contributions made by the end of 2023 will reduce your 2023 taxable income, which is subject to tax in 2024.
Another advantage of opening a PER as a young retiree is that you don’t need to meet any special conditions for early withdrawal to access your savings. They remain accessible at any time, either as a lump sum or as an annuity.