Save for tomorrow and reduce your taxes today. That’s the magic of Retirement Savings (PER). The first benefit of this long-term financial savings product? “It escapes the tax loophole limitation of 10 000 euros», recalls Thomas Ducorps, Head of Employee Savings at Verspieren. The tax increase can thus be much higher!
In particular, you can deduct from your taxable income all the amounts you have paid into your PER, with a double limit: if you are an employee, you will not be able to deduct more than 10% of your net income, up to a general ceiling of €32,908 in this year a year.
For the self-employed, the ceiling is even wider: 10% of taxable profit + 15% of taxable profit between 1 and 8 social security ceilings, with a maximum of… 81,385 euros in 2023.”Logic, explains Pierre-Emmanuel Sassonia, deputy director of EresThe self-employed have to contribute more voluntarily because they have a lower mandatory pension due to the lower rate of contributions.”
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It is taxpayers in the highest tax brackets, at 30, 41 or 45%, who have the biggest gain on PER: if you pay €1,000, the increase is €300 if you are in the 30% bracket, €410 in the 41% bracket and 450 euros in the 45% group. Those who are taxed at 11% or who are simply not taxed have no interest in choosing a PER: not only will they have little or no tax advantage, but their money will be locked away until “retirement” (unless force majeure or the purchase of a principal residence ). For them, it is better to choose life insurance.
PER: tips for reducing income tax with retirement savings
With PER, you therefore benefit from an annually defined deductibility ceiling, which you can even carry forward if you have (or not fully) filled it or not used it (for employees, not for the self-employed). This year, in addition to your payment limit for 2023, you will be able to use unused ones for 2022, 2021 and 2020! These are the net amounts to be deducted. Example: you have a net taxable income of 50,000 euros. If you have not used your ceilings from the previous three years, you can reduce your taxable income by three times €5,000 or €15,000, which will be added to the current year’s €5,000. In total, you deduct 20,000 euros from 50,000 euros of income, or 40%, which escapes tax!
PER: advice on choosing and managing pension savings
It is not finished. If you are married or in a civil partnership, you can also use your spouse’s ceilings if they have not been used either. Finally, you can count the children of your minor children for the last time this year, if you opened a PER for them and paid money into it (the ceiling is limited to 4,113 euros in 2023, for minors as well as for all people who do not have an income). PER, a tax haven? Yes, but beware, there is no exit gift: the annuity or capital is subject to income tax.
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