Here are the 5 best tips to optimize your retirement pension in a simple and free way. Enjoy your retreat as it should be.
Over the course of your career, your salary may change. It can change due to increases, seniority or even inflation. But this is not the case with old-age pensions. It is therefore important to prepare for retirement and not take it at the last minute. In this article, we explain the 5 ways to optimize your retirement pension when the time comes.
Old-age pension: find out about the conditions of the full rate
The first thing to do is take an interest in it! First, you need to analyze the replacement rate. This is the comparison between the pension net of social contributions and the last salary received, net of social security contributions.
For example, an employee born in 1956 who wishes to retire at full rate (without discount or premium) has a rate of 72.6%. An executive employee is only 53.5%, according to information from the Pensions Guidance Council, which dates back to June 2018. So, check out the 5 tips below to help you prepare.
1) Check all your pension rights
The first step is to check your quarters and points. And, to do this, you need to create a retirement account on the info-retraite.fr website. This is the only official site that allows you to edit your career statement. It is normally meant to be complete, but omissions and errors often occur. For example, if you have worked abroad or if your Agirc-Arco points are different while your salary has not changed. In order for these errors to be corrected, proof is required which must be sent to the basic or supplementary pension fund by post at any time.
👉🏼 With inflation of just over 4%, a retiree who receives a monthly pension of 1400 euros would earn 60 euros more every month from this summer thanks to this measure.# Macron2022 🗳🇫🇷 pic.twitter.com/sm9a6HBp6d
– Maxime BOUDET (@maxime_boudet) April 7, 2022
2) Estimate the amount you can collect based on your situation
The career statement indicates the amount of your future “full rate” and your possible retirement date. To find out how many years you have left to work, you need to compare the number of terms you have already acquired with the ones you still have to acquire. People born in 1957 must accumulate 166 quarters and 167 for those born between 1958 and 1960.
To avoid miscalculations, add up the quarters paid (worked) and similar (unemployment, sickness) and the quarters that can be offered (8 per child born before 2010). These elements are not always indicated in your career statement.
For example, if you are 62 and have 6 quarters left, it means that you will have to work another year and a half, unless you accept a reduced old-age pension. With the information from the site, you can estimate the best time to retire. Either from 60, because you have a disability or if you started working as a young person, or from 62, which is the legal age, or even a few years later.
# Presidential2022 LIVE | If this reform is not done “it cannot be done [les pensions de retraite] at 1,100 euros “: Emmanuel Macron defends his pension reform https://t.co/7FW0AN0lqe
– The political world (@lemonde_pol) April 8, 2022
3) Consider the “supplement” option.
Of course, it is possible to continue working even after 62 years. This can allow you to optimize your future retirement pensions. The benefits are real. Indeed: a 5% increase in the basic pension for each additional year of work. And also a higher supplementary pension for Agirc-Arrco. For example, if you exceed the price for at least 4 quarters, you will avoid the Agirc-Arrco malus.
If you go over the price by 2, 3 or 4 years, you can get a “bonus”. Between 10% and 30% for one year on the Agirc-Arrco pension. “The reward is relevant when the salary at the end of the career is much higher than at the beginning of the career. It is also important for an employee who has worked abroad, because it will improve his low pension, linked to a short career in France, ”explains Pascale Gauthier, partner of Novelvy Retraite.
4) Think about progressive retirement
Emmanuel Macron wants to index pensions to inflation “starting this summer” in case of re-electionhttps: //t.co/J3jUS72MpX pic.twitter.com/pwuR9XLcK2
– BFMTV (@BFMTV) April 6, 2022
If you need to work more, you can opt for gradual retirement. This is possible from the age of 60 and if you have 150 quarters of contributions or equivalent. This gives you flexible working hours which are partially offset by a progressive retirement pension. For example, part-time work is between 40% and 80% of full time per year. For part-time work, which represents 70% of full-time work, the pension paid will therefore be 30%.
“With the agreement of their management, same-day executives, who are currently excluded from this system, can switch to a fixed hourly rate by changing their employment contract.” And negotiate the retention of pension contributions based on their previous full time, ”explains Snyla Chinnayya, senior adviser at Mercer France.
This measure is legal and allows you not to lose your accommodation or Agirc-Arrco points. It is all the more important if your new working hours or salary are lower than your starting salary. “An employer can refuse to keep contributions without the employee being able to do anything.
– Emmanuel Macron with you (@withyou) April 6, 2022
He can also accept the employer’s share, in which case the employee pays his share of pension contributions, or he can pay 100% of the employer and employee dues of the former full-time equivalent, which is obviously the best option for the employee, “says Snyla Chinnayya.
5) Consider repurchasing the terms
If you reach legal age soon and are far from having a full pension, consider buying back quarters. This is possible for up to 12 quarters, within the framework of higher education or incomplete years. Depending on the number of quarters redeemed, you can reduce the discount on your basic pension and the reductions on your supplementary pension. Furthermore, the amounts paid are fully deductible from taxable income.
If, on the other hand, your salary exceeds 40,524 euros gross subject to contributions (the maximum annual amount of the Social Security in 2019), the purchase price of a quarter (4,367 euros at 60 years, 4,510 euros at 62 years …) is stable.
It is especially interesting if your salary is high. “However, this operation can only be considered when you have a good idea of your pension rights, the future of regulations and the development of your professional career,” emphasizes Pascale Gauthier.