To ensure the success of pension savings plans (PER), the legislator has provided for several incentive measures, such as the possibility of a capital outflow or the pooling of capital from other pension contracts in the PER. In addition, there is a tax carrot, which ends on January 1, 2023: the doubling of the allowance, beyond which the income is taxed. The interest included in the amounts withdrawn from a life insurance contract (partial or total redemption) is thus exempt from tax up to €9,200 for a single person and €18,400 for a married couple, provided that the amounts raised are reinvested in a PR. .
Life insurance against PER: a tax advantage on terms
By making this transfer, you not only get a double reduction when cashing in on your life insurance policy, but in addition you benefit from the tax benefit given for any voluntary withdrawal on a PER: you can actually deduct the saved amounts from your income within the limit of €4,113.60 minimum in 2022. legal retirement age (62 years), i.e. be at most 57 years old, your insurance policy must have been opened more than 8 years ago and you must complete this transfer before January 1, 2023 Done without delay considering insurance companies’ delays in processing redemptions!
Measure the disadvantages first
The tax carrot should not make you forget the consequences of such an operation. “By passing on a PER, you are taxing capital that is almost exempt from life insurance,” warns Florence Brau Billod, wealth management advisor and president of Patrimoine SA in Marseille.
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In fact, if you take the tax advantage at the entrance to the PER, the exit, whether annuity or capital, will be subject to your income tax. The operation is therefore only of interest if your marginal tax rate on exit is lower than your rate on entry”. Other elements to consider: intended to offer you additional income in retirement, PER is not as flexible as life insurance. Before retirement age, you can only get the capital back in extraordinary situations (life accident, purchase of main residence, etc.), whereas you can partially withdraw from the life insurance when you want, the advantage of carrying out this operation is therefore to ensure that you will not touch the saved amounts, and that they will actually be used to improve your financial comfort in retirement.