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Attracted by the tax benefit put forward by the insurers and banks, many investors do not pay enough attention to the choice and management in the period of their savings contract individual pension-type PERP or Madelin. However, the offer is wide and the possibilities of optimization, even in the course of the contract, are many. The expert Guillaume Lattaignant of Alfineo.fr we unveils.
This post is in response to a first post retirement Savings : PERP or Madelin... or life insurance ? that summarizes the points essential for the functioning of contracts, retirement savings PERP and Madelin and compares them among themselves and with the life insurance.
There are more than 200 contracts of the retirement savings in different PERP and Madelin. All are not created equal : the performance of the media in financial contracts such as guaranteed funds in euros, for example, can go from a single to a double; the fees charged and options guarantee and provident funds are also highly variable. In addition, these contracts are products said to be "tunnels" : they engage you on a long-term, no way. Well to choose and manage their retirement savings may therefore, in the end, make a huge difference !
Guillaume, why is it very important to choose and manage their retirement savings PERP and Madelin in the long term ?
This is a very important issue. Indeed, we observed that many people have not really chosen their contract, retirement savings, and once they have it, do not worry more. It is a wrong. And this for at least three reasons :
The terms of contracts are quite varied. The companies offer different options regarding the charges, the conditions of conversion into an annuity, additional safeguards, etc., The sellers are before the tax benefit of the deductibility of payments to attract investors. They do not always have the time or knowledge necessary to verify the clauses of their contract. Some companies or intermediaries take advantage of this to overcharge a lower quality service.
These contracts bind you to the very long term. The investment horizon is the retirement age, the money that you can afford to hang for 20 or 30 years. It is therefore very important to choose well his contract pension and retirement savings. Imagine, for example, a contract that earns 1% less than the average or costs 1% more in fees each year. At the end of 30 years, this 1% difference will result in a 20% retirement and less.
Support portfolio must be actively monitored. The retirement savings can be allocated (spread) across a range of financial instruments whose risk and return are very varied : the fund is euros, bonds, real estate fund, fund shares, etc., The investor should ensure that the portfolio of materials that result corresponds well to the situation, and this, regardless of the mode of management chosen :
– free management : you are free to choose the media on which you want to invest.
retirement-driven : the insurer is changing for you the composition of the portfolio based on the number of years remaining until retirement. This portfolio will be invested in more risky at the beginning to go to the 100% secure recent years.
What are the main points of vigilance when it chooses a contract PERP or Madelin ?
It is difficult to find the perfect contract on all criteria. Different contracts may correspond to different investors. But unfortunately, there exists contracts that are bad on almost all of the criteria ! The main points of vigilance are the following :
1/ Consider the alternatives in terms of its taxation
We must not be blinded by the tax advantage proclaimed.
The tax-exemption contracts, PERP and Madelin is only advantageous if it is highly taxed, either at a marginal tax rate of 30% or more. The constitution of a retirement savings plan can reduce its income, so its tax during the phase-in savings. In addition, this savings is not counted in the tax base of the tax on wealth (ISF). But it must not be forgotten that, in return, the pension is fully taxed under the regime for taxation of pensions.
Other solutions may be more advantageous if it is weakly imposed. A simple life insurance is not défiscalisée at the time of the payments, but the savings will remain available as long as you wish and can be transferred in a tax-preferred basis. In addition, if the investor decides to transform it into a life annuity at retirement, the pension will have a deduction of tax from 30% to 70% depending on its age.
2/ Negotiate the costs
The entry fee on the payments of the PERP or Madelin can be very important, they vary from 0% to 5%. If the money is placed into a fund euros, which earns 2.5% per year, the gains can be fully cancelled in the first year at least ! In addition, it is necessary to count with the costs of management, comparable to those of life insurance contracts, to be between 0.8% and 1%. Finally, the costs of arbitration in the event of a reallocation of assets are around 0.5%. Fortunately, the arrival of the brokers the Internet has changed a lot in the landscape and can now be found online contracts a lot less loaded in fresh as 10 years ago.
3/ Require the choice, quality and diversity of financial products
This essential criteria is too often overlooked by investors. The diversity of the products available is a necessary condition to ensure a strong portfolio and diversified. Some contracts only offer a single support, managed by the insurer ; others allow you to diversify with a few restrictions ; and other, much more open, offer SCPI and various high-performance funds that make possible a good diversification. I insist on this point : a diversified portfolio, composed of assets with high potential profits, is very important for investors who have an investment horizon longer and can therefore accept more fluctuation in the short term. From this point of view, the contracts of pension savings have also made a lot of progress. They have expanded their offer of media.
4/ Check the exit conditions of a pension
To calculate the pension, the PERP uses the mortality table INSEE in force during the liquidation of the pension. For Madelin, the used table may be the table in effect on the day of the liquidation, the date of the payment, or the day of accession to the contract, which is more favorable. It is therefore a point to check.
It is also necessary to weigh the pros and cons of different annuity options that allow for example :
to protect his partner by a condition of reversion of the annuity in case of death ;
to modulate the pension based on its estimate of requirements (for example, more pension in the beginning, and less later, or the opposite) ;
or to guarantee a certain number of annuities.
These options are set once for all at the time of the winding-up to the age of retirement.