here are the 5 best tips to optimize your retirement amount

During your career, your salaries may change. Following increases, depending on your seniority or even inflation. But this is not the case with old-age pensions. Hence, it is important to prepare for retirement and not do it at the last minute. In this article, we explain the 5 ways to optimize your retirement when the time comes.

Retirement: know 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. It is a comparison between the pension net of social security contributions and the last salary received, net of social security contributions. For example, an employee born in 1956 who wants to retire at full rate (without discount or bonus) has a rate of 72.6%. A managerial employee is only 53.5%, according to information from the Pensions Guidance Council dating back to June 2018. So, find out the 5 tips below to prepare yourself.

1) Check all your pension rights

The first step is to check your quarters and points. And, for that, you need to create a retirement account on the site info-retraite.fr. This is the only official site that allows you to edit your career statement. It should normally be complete, but oversights 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 by post to the basic or supplementary pension fund at any time.

2) Estimate the amount you can receive depending on the situation

The career statement tells you the amount of your future “full rate” and your eventual 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 and those you have left to acquire. Those 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 assimilated (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 you will have to work another year and a half unless you accept a reduced old-age pension. With the information on the site, you can estimate the best time to retire. Either from the age of 60, because you have a disability or if you started working as a young person, or from the age of 62, which is the legal age, or even a few years later.

3) Analyze 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 complement for Agirc-Arrco. For example, overquoting at least 4 quarts will allow you to escape 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 the starting salary. 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) Consider gradual retirement

If you need to work harder, you can opt for gradual retirement. This is possible from the age of 60 and if you have contributed or assimilated 150 quarters. This results in a reduction in working hours which is partially offset by a progressive retirement pension. For example, part-time is between 40% and 80% of full-time yearly. For part-time work which corresponds to 70% of full-time work, the portion of the pension paid will therefore be 30%.

Executives on a daily flat-rate regime, for the moment still excluded from this regime, in agreement with the management, can switch to the hourly flat-rate, with modification of the employment contract. And negotiate retention of pension contributions based on their previous full time“, explains Snyla Chinnayya, senior consultant at Mercer France.

This measure is legal and allows you not to lose your accommodation or Agirc-Arrco points. It is even more important if your new working hours or pay is lower than at the start. “An employer can refuse this retention of contributions without the employee being able to do anything about it. He can also accept it up to the level of the only share paid by the employer, and in this case the worker pays his share of pension contributions, or even assume 100% of the shares of the employer and the employee of the former equivalent to full time, which of course is the best option for the employee“, informs Snyla Chinnayya.

5) Investigate the option to buy back terms

If you are soon reaching legal age and are far from having a full pension, consider buying back quarters. This is possible for up to 12 years, in the context of higher education or incomplete years. Depending on the quarters redeemed, you can reduce the discount on the basic pension and the discounts on the 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 for a quarter (4,367 euros at 60 years, 4,510 euros at 62 years, etc.) it is stable. This is especially interesting if your salary is high. However, this can only be considered when you have good visibility on your pension rights, the future of the legislation and the progress of your professional career.“, emphasizes Pascale Gauthier.


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