401(k)s and Retirement: Why You Should Start This Summer.
Less pressure, more clarity: what if summer were the best time to put your retirement savings strategy in place? Right in the middle of summer, French people can take advantage of this quieter period to set up recurring payments, transfer their old retirement plans, and optimize their tax situation.
Summer: The Right Time to Plan for… Your Golden Years
While July is often associated with relaxation, few realize that this time of year can also be the perfectmoment to make a pivotal financial decision: investing in your retirement. “It’s the perfect time to take simple steps, without tax stress or time constraints,” explains Grégory Siesse, director of development at Eres, a retirement savings specialist.
According to the 2024 AMF Barometer, 53% of working adults are setting aside money for retirement, but only 21% do so on a regular basis. However, there are three simple strategies for making effective progress, and summer is the perfect time to put them into action:
1. Set up scheduled payments: the effort is spread out over time, and discipline becomes automatic. 80% of regular savers use this method.
2. Consolidate your plans into a PER: Since the passage of the Pacte Act, it’s been possible to combine PERP, Madelin, and Article 83 plans—among others—into a single Retirement Savings Plan (PER), which is more flexible and offers tax advantages.
3. Check your tax deduction limit: many people forget that it’s listed on their most recent tax return. It’s better to look into this in the summer than to rush to do so in November.
Contrary to popular belief, the timing of your contributions matters. Investing as early as July allows you to capitalize on strong year-end stock market performance—a phenomenon well known to portfolio managers, known as the year-end rally. In 2024, the MSCI World Index rose 18.7%, the S&P 500 by 24.5%, and the Euro Stoxx 50 by 11%. All of these gains can be captured if you start investing before fall.
How much should you save? A simple method based on age
With an average net pension of €1,661 per month (source: DREES 2025), many French people will need additional income to maintain their standard of living in retirement. To aim for €2,500 per month over 24 years, you would need to generate an additional €880 net, which amounts to an estimated €300,000 in capital to be accumulated by the end of your career.
Based on the defined target need, the simulations conducted by Eres make it possible to estimate the monthly savings required depending on the age at which one begins contributing. For someone who starts at age 30, the gross monthly savings amount is €280—or about €196 after taxes (assuming a marginal tax rate of 30%)—over a 34-year savings period. If you wait until age 40 to start, the amount rises to €540 gross per month—or €378 net—over a 24-year period. At age 50, you’ll need to contribute €1,236 per month (gross), or €865 net, for 14 years. Finally, if you start at age 55, the required contribution becomes much higher: €2,205 gross per month—or €1,544 after taxes—to be paid over just 9 years.
