What you need to know before deciding on liquidation of your personal PER

When the retirement age is reached, the beneficiary can request that the accumulated savings in his Personal Retirement Savings Scheme (PER) be paid to him in various forms. This includes liquidating your PER. In what form? Then which one would be most beneficial? How to choose? Here are some tips to consider before making a decision.

Personal PER is a long-term savings product that allows you to save during your working life to earn, from retirement age. capital, or an annuity in the form of periodic payments for a period fixed by contract or until death.

At retirement age, the beneficiary can request that the accumulated savings in the individual PER be paid either in capital, or in annuity or partially in capital and annuity, the official French administration explains. To optimize the liquidation of an individual PER, it is about knowing the requirements and tax laws depending on the option the beneficiary chooses.

How to choose your life annuity

An annuity exit would be perfect for those looking to supplement regular income, explains Borsorama. With this in mind, it is possible to opt for: simple life annuity (income received for life), reversible life annuity (income for life and after death, the annuity is paid to the beneficiary of your choice), life annuity with guaranteed annuity (free Annuity payments in a fixed minimum period.

In the event of death during this period, the beneficiary will receive the annuity for the remaining period of coverage, and finally, an increased or reduced life annuity (allowing the amount to adjust over time). “In terms of taxation, if you have benefited from a tax benefit at the time of payment of the amount to the PER, then the life annuity will be taxed as per the tax regime for gratuitous annuity: Income after annuity is subject to tax. A reduction of 10%. Social security contributions of 17.2% apply to a fraction of savings based on your age. For example, it is 60% if you are between 60 and 69 years of age,” explains the source.

Benefit of split capital withdrawal in retirement

Capital outflow allows you to access accumulated savings immediately. However, you should know that “those who benefit from a tax advantage at the time of payment of the amount on PER: On exit, the capital is taxed on the progressive scale of income tax (but not on the withholdings social), and the interest is a single flat-rate of 30% The rate is subject to deduction,” recalls the source.

“Once in a capital flow situation, the risk of a change in income tax bracket increases”. And therefore probably pay more tax. So it is better to “opt for split capital exit”, it is advised.