Retirement Savings Plan (PER): How Can You Make the Most of the Final Stages of Your Career?
Planning for retirement is no longer just about “putting money aside.” For many working people, it also involves thinking about how to supplement their future income, manage their assets, and—when appropriate—reduce their tax burden while they’re still working. It is with this in mind that the PER (Retirement Savings Plan) was created. Available since October 1, 2019, it is intended to gradually replace several older retirement savings products.
In a nutshell:
The PER allows you to plan for retirement with dedicated long-term savings ;
Voluntary contributions may be deductible from your taxable income, depending on your circumstances;
Payouts can be made as a lump sum, a lifetime annuity, or a combination of the two;
In certain cases, early withdrawal is permitted, such as when purchasing a primary residence;
Choosing the right contract and investment vehicles is essential to truly optimize your strategy.
What is the PER?
The PER, or Retirement Savings Plan, is a long-term savings product. It allows you to save during your working life so that, when you retire, you will have a lump sum, a lifetime annuity, or a combination of the two. In practice, it can take the form of a securities account or a group insurance policy, depending on the type of PER you choose.
The basic principle is this: you contribute to the plan over time, and then you receive your savings upon reaching retirement age. However, the regulations do provide for certain cases of early withdrawal. It is therefore a product designed for the long term, intended to help you gradually prepare for the end of your career and the potential decline in income when you stop working.
Since the reform took effect in 2019, the PER has existed in three main forms. The individual PER succeeds the PERP and the Madelin contract. The collective employer-sponsored PER replaces the Perco. The mandatory employer-sponsored PER, in turn, succeeds the “Article 83” contract. Existing plans that were already opened may, under certain conditions, be transferred to a new PER.
The Three Components of the PER
Although the PER is often referred to in the singular, it actually consists of three sub-funds, organized according to the source of the contributions.
Account 1: Receives voluntary contributions from the account holder.
Fund 2: Intended for funds derived from employee savings and employer contributions.
Compartment 3: Collects mandatory contributions paid into certain employer-sponsored PERs.
This structure is important because it has very concrete implications at the time of withdrawal: tax treatment, withdrawal options, and the procedures for retrieving funds are not always the same depending on the sub-fund in question.
Why open a PER?
The main reason to open a PER account is its tax benefit. Voluntary contributions are, in principle, deductible from taxable income, provided they are made before age 70. It is also possible to waive this deduction at the time of the contribution. However, even though there is no cap on voluntary contributions themselves, the tax benefit they provide is subject to limits.
In practical terms, this means that a taxpayer in a high marginal tax bracket may see an immediate benefit. Indeed, each deductible contribution reduces the income tax base. This is one of the main arguments in favor of the PER. However, this benefit must always be weighed against the taxation applied at withdrawal. A PER should therefore not be evaluated solely at the time of contribution, but over the entire holding period.
Second reason: securing your future. Many working adults today anticipate a decline in income upon retirement. Having a dedicated fund, managed for the long term, can help supplement your pensions, finance projects, or approach the end of your career with greater clarity. If you want to build your wealth strategy gradually, the PER is ideal.
Finally, the individual PER is open to a wide audience. There are no requirements based on employment status: employees, self-employed individuals, business owners, professionals, job seekers, and retirees can all enroll, provided they are at least 18 years old and have the necessary legal capacity.
PER: How Does Savings Management Work?
By default, the PER is managed according to the principle of guided management. This means that when retirement is still far off, savings can be invested in riskier—but potentially higher-yielding— assets. Then, as retirement age approaches, the asset allocation is gradually shifted toward less risky investments.
This principle of gradual risk reduction serves a specific purpose: to seek out potential returns while there is still time, and then to reduce risk exposure as retirement draws near. This mechanism makes sense in theory, but it does not eliminate the need to closely examine the quality of the contract, the fees charged, the diversity of investment vehicles, and the actual level of risk taken.
The PER manager must also provide the subscriber with clear information when the plan is opened and then annually. This information includes, in particular:
the terms and conditions for transferring the contract.
Starting in the fifth year before retirement, the employee may also consult the administrator about the withdrawal options best suited to his or her situation.
PER: Which Investment Vehicles Should You Choose?
An insurance-based PER provides access to euro-denominated funds, which are marketed as a safe investment for protecting certain amounts of money. An investment-based PER, on the other hand, operates through a securities account and allows, in particular, for the direct purchase of stocks and access to riskier assets.
Euro-denominated funds prioritize stability. They may be suitable for the conservative portion of a retirement plan, particularly as the investment horizon shortens. More dynamic investment vehicles, on the other hand, are more exposed to market fluctuations but can offer greater potential returns over the long term. Finding the right balance therefore depends on:
your overall wealth management strategy.
Summary table to help understand the main differences in investment vehicles within a PER:
What are the benefits of the PER?
The primary advantage of the PER is therefore tax-related, but it is not the only one. The plan also offers a certain degree of flexibility at the time of withdrawal. Upon retirement, the savings accumulated in an individual PER can be withdrawn as a lump sum, as a lifetime annuity, or partially in either form. The lump sum can even be paid out in one or more installments.
Another advantage: voluntary contributions to a PER are unrestricted. They can be scheduled or made on an ad hoc basis. This makes the product compatible with a variety of savings patterns. Some savers prefer to spread their contributions over time, while others make more opportunistic contributions—for example, at the end of the year to optimize their tax situation.
Good to Know
Existing retirement savings plans can be transferred to an individual PER. Savings accumulated in an individual PER can also be transferred to other PERs. The transfer is free after the account has been held for 5 years. Before that time, fees may be charged up to 1% of the accumulated savings.
PER: What Are the Drawbacks and Risks?
In principle, savings are locked up until retirement. This is an advantage if you’re looking to stay disciplined over the long term. It’s a constraint if you think you’ll need cash before then. The PER should therefore not replace readily accessible emergency savings.
It’s also important to keep in mind that not all investment vehicles carry the same level of risk. Managed accounts may expose your savings to riskier assets when retirement is still far off. This approach can make sense over the long term, but it requires accepting a certain degree of volatility. A PER is therefore not automatically synonymous with absolute security. It all depends on the plan’s structure and investment vehicles.
Another key consideration: taxation at withdrawal. This varies depending on whether contributions were deducted from taxable income and whether the withdrawal is made as a lump sum or an annuity. For example, when contributions were deducted, the annuity is taxable under the retirement pension tax regime, with a 10% tax deduction. In the case of a lump-sum withdrawal, the portion corresponding to the tax-deductible voluntary contributions is taxed at the progressive income tax rate.
Conversely, when contributions were not tax-deductible, the portion of the lump sum corresponding to those contributions is exempt from income tax and social security contributions. Only the gains are then subject to the flat-rate withholding tax. A PER should be considered as part of a comprehensive optimization strategy, rather than as a mere tax-saving measure.
PER: Under what circumstances can you withdraw your savings before retirement?
The regulations provide for several cases in which funds may be withdrawn early. The two main categories are unforeseen life events and the purchase of a primary residence.
Unforeseen life events include, in particular:
disability of the policyholder, his or her children, or his or her spouse or civil union partner;
the death of a spouse or partner;
the expiration of unemployment benefits;
or the cessation of self-employment following a judicial liquidation.
Added to this is the purchase of a primary residence, with one exception: the funds derived from mandatory contributions ( i.e., the total in Sub-account 3 ) cannot be used for this transaction.
The PER is not a fund that can be freely accessed at any time, but it is also not completely locked up under any circumstances. In certain life situations, this option for early withdrawal can make it particularly attractive.
Should you open a PER if you aren't liable for taxes?
If you are not subject to income tax, the immediate tax benefit of the PER automatically loses its value, since the deduction of contributions has less—or even no—effect. However, this does not automatically mean that the PER offers no advantages. It is still possible to opt for non-deductible contributions, which will subsequently affect your tax liability upon withdrawal.
In this case, the rationale is no longer primarily tax-related at the time of contribution. It can become a wealth-building strategy:
build up long-term savings;
to build up a source of future income;
gradually plan for retirement.
On the other hand, for a taxpayer who is not subject to income tax, it would make more sense to compare the PER with other, more flexible investment vehicles—such aslife insurance—before making a decision. The product may be a good fit, but it is not necessarily the best option in every case.
Good to Know
Before opening a PER account, take the timeto analyze the fees (management, trading, and deposit fees) and the quality of the investment vehicles offered . These factors can have a significant impact on long-term performance.
How can you tell if the PER is right for your situation?
A P/E ratio is often attractive when several conditions are met:
you have a long-term investment horizon;
you're ready to set aside a portion of your savings until retirement;
you already have an emergency fund elsewhere;
and it is in your best interest to weigh your current tax situation against a potentially different future tax situation.
Conversely, if you prioritize full access to your savings, if you have a low tolerance for market fluctuations, or if your tax situation makes the immediate benefit negligible, it may be wise to take a step back before signing up.
The PER is not just a retirement savings product. It is also a wealth management tool that can serve several purposes:
build up a source of supplemental income for the future;
take advantage of a favorable tax framework today;
structure a long-term savings plan while maintaining some flexibility when it comes time to withdraw the funds.
However, you should never invest in it on autopilot. Its suitability depends on your tax bracket, your investment horizon, your need for liquidity, your risk tolerance, and your overall financial plan. With this in mind, it may be wise to seek professional guidance to analyze your tax situation and choose the right level of exposure.