Life insurance, PER… Be aware of the choices you make in relation to savings. As Planet explained to you, certain financial investments are more attractive at 50 than at 40, at 60 than at 70. This is the case, for example, with PER, which can be opened at any age, but imposes strict withdrawal conditions before retirement age. Life insurance, for its part, remains the investment of choice for the French, although it has lost its luster in recent years.
Transferring from life insurance to a PER: when is it worth it?
The most careful savers know you only have a few weeks left to transfer your life insurance to your PER under the best conditions. In fact, until December 31, 2022, you will enjoy significant tax benefits, and it would be foolish to miss out. What are the transfer conditions? Who can do it? We take stock with Olivier Rull, co-founder of Caravela new generation 100% digital supplementary pension.
Is it better to keep your life insurance or transfer it to a PER?
Oliver Rull. It’s really a personal choice, but you need to consider two things when deciding. The first: what is the amount we need to transfer and what is it its share in relation to total financial assets ? If this amount is greater than 10% of the financial assets, it is advisable to transfer it. The second element is of course knowing whether we opened a PER or not.
If we haven’t opened one yet, is it time to do so?
Oliver Rull. We always recommend opening a PER, but above all don’t invest all your savings in it. It is important to have a vision of what is fluid or not and PER is not. We come to block a small part of our savings, but it is an extremely well-made product.
If you complete the process before December 31, you will get very attractive tax credits
Why especially December 31, 2022?
Oliver Rull. If you make the transfer before 31 December, you benefit from very attractive tax deductions and benefits:
- Everything invested in a PER can be deducted from the taxable income
- There is a tax credit on life insurance, it is around 4,000 euros and it is doubled for individuals, up to 9,200 euros. We do not pay tax on 9,200 euros in capital gains
If we do not make the transfer before 31 December, we will not be able to benefit from the tax benefit as it has ended. In 2023, there will still be a possible tax reduction via PERbut not the benefit of tax relief on life insurance.
What conditions must be met to make this transfer?
Oliver Rull. To transfer your life insurance policy, you must has held the contract for more than eight years, be more than five years from retirement and pay all amounts back to PER. The process is very simple: first you release the money on your life insurance, then it is paid into a PER before the set date. We therefore make a request to release the money from the company that hosts the life insurance that makes the payment. Then at the chosen PER provider – if you don’t have one yet – you ask to open a contract and you pay the money.