Why It's Urgent to Open a PER for Your Children

You can set up a retirement savings plan—in the form of a PER—for your children. The savings you have accumulated for your child will be locked in until they retire, unless they decide to purchase real estate. 

In this case, the child will be able to withdraw funds from their PER to make their down payment. This gives you the assurance that this money will be put to good use. There are two benefits for you! In addition to having control over these savings, you can deduct the contributions you make to this PER from your income taxes. Keep in mind that the tax savings generated by contributions to the PER are not subject to the cap on tax breaks (10,000 euros per year per tax household). However, the law caps the amount of contributions deductible from taxable income at 10% of the annual Social Security ceiling (PASS) for the year preceding the year of the contribution. That amounts to 4,114 euros for a contribution made in 2022.

But be aware: opening a PER in the name of your minor children may soon no longer be possible. Until now, a legal guardian could open a retirement savings account on behalf of their children. As the legal guardian, you manage the account until they reach the age of majority and benefit from tax deductions on the contributions made. This is one way to take full advantage of this tax benefit.

However, if the 2024 Finance Bill is passed as is, it will no longer be possible for those under 18 to open a PER account. In fact, the bill provides for the creation of a “Climate Future Savings Plan (PEAC),” a new savings product exclusively reserved for people under 21.

The creation of this plan designed for young people provides the government with an opportunity to restrict access to the PER. In the same section (Section 3) of the bill that establishes the tax regime for the PEAC, the 2024 budget “eliminates the possibility for minors to open a retirement savings plan (PER) in order to limit tax-optimization behavior related to the deductibility of voluntary contributions from the income tax base,” to quote the explanatory memorandum of the bill presented by the Ministry of Finance.

The bill submitted to Parliament includes the following provision: “The holder of an individual retirement savings plan must be at least 18 years old on the date the plan is opened.” If the bill is adopted as is, this measure will take effect on January 1, 2024.