Changes to French PER (Retirement Savings plan) Tax Benefits for Seniors
Teh French Plan d’Épargne Retraite (PER), a retirement savings plan, is undergoing changes that will impact seniors, particularly those who continue to work past age 70. A key tax benefit – the deductibility of contributions from taxable income – will be eliminated for those aged 70 and over, effective January 1, 2026, as outlined in the 2026 Finance law. This shift, coupled with increased social levies, is prompting seniors to re-evaluate their retirement savings strategies.
The Disappearing Tax advantage
Currently, contributions to a PER are deductible from taxable income, offering a meaningful tax reduction incentive, especially for self-employed individuals and professionals seeking to smooth income fluctuations later in their careers. Though, the 2026 Finance law removes this deductibility for individuals aged 70 or older. While the structure of the PER itself remains unchanged, its primary tax advantage will disappear for this demographic.
This change means that contributions made after age 70 will no longer reduce taxable income. Consequently, the same savings will be subject to taxation, potentially leading to a higher tax bill for seniors who continue to contribute to their PER.
Who is Affected and Why?
The primary impact will be felt by those over 70 who remain employed, particularly self-reliant professionals and liberal professions (e.g., doctors, lawyers, architects) who are subject to income tax and may have variable incomes. These individuals frequently enough utilized the deduction to offset income from bonuses or particularly profitable years.without this benefit, contributions will directly increase their taxable income and, therefore, their tax liability.
Adding to this change is an increase in social levies on PER earnings to 18.4%. Together, assurance-vie (life insurance) policies are exempt from this increase. This signals a tightening of the tax framework surrounding PERs for seniors, especially those who rely on capital accumulation to supplement their income.
Adapting Your Retirement Savings Strategy
Before Age 70:
For taxpayers still under 70, the PER continues to offer significant tax advantages. Voluntary contributions remain deductible within established limits. it is advisable to anticipate and make contributions before reaching the age of 70 to secure the deductibility benefit while it lasts. This is particularly critically important for those who started saving late in life and rely on PER capital to supplement a modest pension.
After Age 70:
While it remains possible to contribute to a PER after age 70, there will be no tax deduction. The decision to continue contributing then becomes purely budgetary and based on overall financial planning, rather than tax benefits. It’s crucial to compare the “net savings effort” through a PER (without deduction) with choice investment vehicles like assurance-vie, which remains unaffected by the increase in social levies.
the PER is not being eliminated, but its key advantage for taxable seniors disappears after age 70, necessitating a shift in retirement savings strategies. Seniors shoudl carefully evaluate their options and consider the overall financial implications of continuing to contribute to a PER versus utilizing other available investment tools.
Sources:
* https://www.service-public.fr/particuliers/vosdroits/F36669 (French government website explaining PER)
* [https://www.capital.fr/economie/finances-personnelles/retraite/per-ce-qu-il-faut-savoir-avant-2026-pour-ne-pas-perdre-les-avantages-fiscaux-1424111](https://www.capital.fr/economie/finances-personnelles/retraite/per-ce-qu-il-faut-savoir-avant-2026-pour-ne-pas-perdre-les-avantages-f