Retirement Savings Plan

§ 01

The principle: from taxed income to deferred income

Contributions to a PER are deductible from taxable income up to an annual cap (10% of professional income, within a set range). The tax is not erased: it is deferred to withdrawal, when you are (often) in a lower TMI bracket. The gap between your TMI during your working years and in retirement is the net gain.

§ 02

The calculation you need to know how to do

Contribution times today's TMI equals immediate tax savings. At withdrawal, the capital is taxed at your TMI at that time. The real net gain equals (current TMI minus future TMI) times the contribution, plus the compounded return.

• Example: €10,000 contributed at a 41% TMI equals €4,100 in immediate tax savings
• Withdrawal at a 30% TMI 20 years later equals €3,000 in tax (before compounding)
• Net tax gain: €1,100, on top of which comes the compounded growth of the invested capital

§ 03

Lump sum or annuity: choosing wisely

Since the PACTE law, withdrawing as a lump sum is unrestricted (unlike the old PERP/Madelin plans). The choice between a lump sum, an annuity, or a mix depends on your tax situation at withdrawal, your life expectancy, and your liquidity needs. In most cases, the annuity is tax-penalising for moderate amounts.

§ 04

Early withdrawal to buy a primary residence

The PER allows an early withdrawal to buy a primary residence. This is an under-used lever: contribute, deduct, let it grow, then withdraw for the down payment, all while having reduced your tax bill during the accumulation phase.

§ 05

Individual PER vs company PER

The PERin (individual PER) is managed by the policyholder. The PERCOL/PERO (company PER) often comes with an employer top-up (abondement) that multiplies the savings effort. For a company director, combining both lets you stack the contribution caps.