Why make deductible payments on my Collective and/or Mandatory PER?

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This option is advantageous if you currently have a marginal tax rate (MTR) greater than or equal to 30% . This is in reality a deferral of tax, which you will have to pay upon exit on the capital constituted. However, it is very likely that you will have a lower IMR in retirement linked to a drop in income, you will therefore have made tax savings in the meantime and this excess savings will also have allowed you to increase your earnings.

Concretely, what does this look like in real conditions ?

At age 45 , you make a payment of €10,000 to your Collective PER or Mandatory PER which you choose to exempt from tax. You are in the marginal tax bracket (MIT) at 41% . You thus realize a tax saving of €4,100 (€10,000 x 41%) at the time of payment.

Upon retirement (departure at age 65):

• Your €10,000 became €18,000 thanks to the return on your savings (3% return on average per year over 20 years).

• Your TMI increases to 30% because your income has decreased in retirement.

• You decide to withdraw this sum in one go (capital outflow).

The €10,000 corresponding to your payment is taxed at 30% (new TMI). After paying this €3,000 in tax, you therefore have €7,000 net left.

The €8,000 of gains (“capital gains”) are subject to flat tax (30%). After paying this flat tax (€2,400), you therefore have €5,600 net left.

💰 At the end of the day, you will receive €12,600 net for a real savings effort of €5,900 (€10,000 payment - €4,100 tax savings).