The PER (Retirement Savings Plan) is a product that seems totally suited to this long-term savings strategy. This is a new savings product designed to encourage regular savings in a “locked-in” product until the saver’s retirement. The sums placed in the PER are deductible from the taxpayer’s taxable income and therefore allow tax exemption up to the taxpayer’s marginal tax bracket in the year of payment.
On the other hand, upon departure upon departure, the capital or annuity paid will be taxable with income tax. The sums corresponding to the sums saved will be taxable according to the marginal tax bracket of the retired taxpayer while the capital gains accumulated during the savings phase will be taxable at the flat rate of 30% (PFU rate). You can visit taxfyle.com/blog/turbotax-alternatives for the best deals.
In short, you will understand the tax advantage is not decisive to justify the opening of a PER
The PEA could also be a particularly attractive option to prepare for your retirement. Unlike the PER, the PEA does not offer tax exemption when paying sums. On the other hand, the exit of the PEA, in annuity or capital, will be completely tax-exempt after 5 years of detention (no need to block savings during all its working life).
In addition, investment in live securities can be made without management costs (unlike the PER)
The question is then to know if the high management costs of the PER are justified in view of the low tax savings and the blocking of savings. I do not believe that. Pea seems preferable to me.
Enhance your heritage with tax exemption products
Beyond the PEA and PER which allow you to prepare for your retirement, but also to hope for a significant valuation of your assets thanks to the investment in the capital of companies, it is possible to use tax exemption products to enhance your heritage, that is to say to invest in solutions with high return prospects.
In theory, and the speech is appealing, investment in unlisted companies, SMEs and other innovative companies are naturally investments at the origin of these strong promises. Unfortunately, and this is often the case when we talk about tax exemption, these financial products (FIP, FCPI) are so loaded with fees that the performance is not up to the risk for savers.
Rental real estate investment, an effective solution to tax exemption and meet the main heritage objectives
Real estate investment will be the ideal solution for savers who seek to enhance their assets, but also prepare for retirement. Real estate investment is then an appropriate response to all heritage issues, or almost.
Not only, real estate investment, but also in land deficit, will allow:
- Prepare for your retirement thanks to the property income which will constitute a perfect additional income in retirement;
- To enhance your assets thanks to the leverage effect of real estate loans, the indexation of rents and real estate prices according to the dynamism of the economy.
- To tax in a particularly effective way with a reduced savings effort. Tax profitability is higher in rental property than in all other tax exemption solutions.
For example, a company investment of € 250,000 / 12 years means € 52,000 in income tax reductions accumulated over 12 years. This is a very high tax efficiency that can be obtained thanks to a relatively limited savings effort thanks to the leverage effect of mortgage loans.
However, as we explain to you in our book “Investing in real estate”, the tax exemption industry tends to take advantage of the tax obsession to increase the sale prices and reduce the patrimonial interest of the investment over rental real estate. It is important for the new real estate in which you must invest to benefit from the law for example is – + 30% more expensive than old real estate.
For the Investments
The investor will have to be excessively attentive to the acquisition price of his property if he wishes to succeed in his investment, even if today, the refocusing of the PINEL law on tight areas reduces the risk of investing in a location of poor quality.