Case Studies & Examples

A young professional should first build an emergency fund of 3 to 6 months of expenses in a Livret A and LDDS. Next, open a life insurance contract to establish a fiscal date (even with a minimal 100 euro deposit) and a PEA to invest in equities via global ETFs. If their TMI is at 30% or higher, regular PER contributions are relevant. With a horizon of more than 30 years before retirement, an allocation of 80 to 100% in equities via ETFs is justified to maximize compound interest capitalization. Concretely, 200 euros per month invested in a global ETF at age 25 with a 7% annualized return produces a capital of approximately 580,000 euros at age 60, of which more than 490,000 euros are gains: the power of time is the young investor's greatest ally.

This couple in the 30% bracket should combine PER contributions (up to 8,000 euros each to save 4,800 euros in tax) with a balanced managed life insurance portfolio for medium to long-term savings. For children's education in 10-15 years, a life insurance policy with 60% equity ETFs and 40% euro funds is relevant. Each spouse's PEA can receive regular contributions in European ETFs. Finally, they must verify their beneficiary clauses and consider a cross-dismemberment arrangement to protect the surviving spouse. Over 20 years, with this multi-wrapper strategy, this couple can expect to build financial wealth of approximately 400,000 to 500,000 euros, in addition to their primary residence, guaranteeing a comfortable retirement supplement of 1,500 to 2,000 euros per month.

A business owner (self-employed or assimilated salaried) can use the PER to optimize their overall compensation. As a self-employed worker, their PER deduction ceilings are enhanced and can reach 80,000 euros per year. They can favor higher compensation in years when they contribute to the PER to maximize tax savings, and reduce compensation in years without contributions. The combination of individual PER and company PER allows multiplying deductible contributions. In anticipation of a business sale, the PER allows smoothing the taxation of capital gains by spreading contributions over several years.

At 6 years from retirement, the pre-retiree must begin progressively securing their allocation. If in the 41% bracket, they should maximize PER contributions using carried-forward ceilings from the three previous years to generate a substantial tax saving. Their long-standing life insurance (over 8 years old) becomes a supplementary income tool thanks to allowance-based withdrawals. The allocation should shift from 60% to 40% equities over the next 6 years, reinforcing euro funds and secure bonds. By combining PER ceilings from four available years, this pre-retiree can potentially deduct up to 140,000 euros from their taxable income over two years, generating a tax saving of 57,000 euros at a 41% TMI, an exceptional tax lever at the end of a career.

The retiree must distinguish between premiums paid before and after age 70. If their existing life insurance contracts were funded before age 70 with up-to-date beneficiary clauses, their heirs will benefit from the 152,500 euro allowance each. For post-70 contributions, they can still contribute to a new life insurance policy: only the premiums will be subject to the global 30,500 euro allowance, with gains being completely exempt. With a 10-15 year horizon, a 200,000 euro investment after age 70 can generate 80,000 to 100,000 euros in gains exempt from inheritance tax.

The impact of fees is considerable over the long term due to the compounding effect. Let us compare two contracts with an initial 50,000 euro investment and identical gross performance of 6% per year over 25 years. With total fees of 0.8% (online contract), the final capital reaches 172,000 euros. With total fees of 2.5% (traditional bank contract), it reaches only 116,000 euros. The 56,000 euro difference represents more than the initially invested capital. This is why choosing a contract with controlled fees is one of the primary performance levers for the saver. Additionally, entry fees, sometimes overlooked, matter too: a 50,000 euro deposit with 3% entry fees in a traditional bank represents 1,500 euros lost on day one, an amount that could have generated more than 6,000 euros in additional gains over 25 years at a 6% annual return.