Planning Your Retirement Step by Step: Complete Guide 2026

Retirement is not something you prepare for six months before leaving your job. It is a long-term project that is built progressively, year after year, adjusting decisions based on your career development, income and life goals. Yet, according to a survey by the Cercle des Epargnants published in 2025, over 60% of French residents have no idea how much their future pension will be. This lack of forward planning often leads to difficult financial situations at retirement, with a standard of living that can drop by 30 to 50% compared to working life.

This guide offers you a structured, step-by-step method for planning your retirement in 2026 with confidence, whatever your current age.

Step 1: Estimate your financial needs in retirement

The first question to ask is simple in appearance but fundamental: how much will you need each month once retired? The answer depends on your current lifestyle and what you envision for retirement.

Wealth management advisors generally use the 70-80% rule: a retiree needs 70 to 80% of their last net income to maintain their standard of living. This estimate accounts for the disappearance of certain work-related costs (commuting, professional clothing, lunch expenses) and the potential end of mortgage repayments on the primary residence.

However, this rule is an average that masks wide disparities. Some spending categories increase in retirement: leisure, travel, unreimbursed health expenses, help for grandchildren. Others decrease: employment-related costs, savings itself (you no longer need to save for retirement once retired), and taxes in most cases.

For a realistic estimate, prepare a detailed projected budget by listing your current expenses and adjusting them item by item. Do not forget to include health expenses, which increase significantly with age, as well as potential long-term care costs later in life.

Step 2: Assess your pension entitlements

Once your needs are estimated, you must determine what the mandatory pension system will pay you. Several tools are available for this.

The official simulator from GIP Union Retraite, accessible on info-retraite.fr, is the reference tool. It aggregates data from all your pension schemes (regime general, supplementary AGIRC-ARRCO schemes, special schemes) and provides a personalized estimate of your pension based on different retirement ages. Since 2024, this simulator incorporates the effects of the 2023 pension reform.

Your individual status statement (releve individuel de situation -- RIS), sent automatically every 5 years from age 35, summarizes all your acquired rights. Check it carefully, as errors are common, especially for periods worked abroad, multiple activities, or changes in professional status.

Step 3: Calculate the gap between needs and acquired rights

The gap between your estimated needs and your projected pension is the amount you will need to fill through personal savings. This is what professionals call the "retirement gap."

Let us take a concrete example. Sophie, 45, is a private-sector executive earning 4,500 euros net per month. She estimates she will need 3,500 euros monthly in retirement (78% of her current income). The info-retraite simulator indicates a projected pension of 2,400 euros per month at 64. Her retirement gap is therefore 1,100 euros per month, or 13,200 euros per year.

To fill this gap, Sophie must build up a capital capable of generating these 1,100 euros monthly throughout her retirement. Applying the "25 times annual expenses" rule (based on a 4% annual withdrawal rate), she needs a capital of 330,000 euros at the time of retirement.

This calculation should be performed in constant euros, i.e. accounting for inflation. A gap of 1,100 euros today will correspond to approximately 1,500 euros in 19 years with average inflation of 2% per year.

Step 4: Strategies for bridging the retirement gap

Several savings and investment vehicles can help build the required capital. The optimal strategy generally combines several of them.

The Plan d'Epargne Retraite (PER)

The PER is the dedicated retirement savings wrapper. Its main advantage is the deductibility of contributions from taxable income, within the deduction cap (10% of net professional income, with a minimum of 4,637 euros and a maximum of 37,094 euros in 2026). For a taxpayer with a marginal tax rate of 30%, each euro contributed to a PER effectively costs only 0.70 euros thanks to the tax saving.

The PER offers great flexibility at exit: lump sum, life annuity, or a combination of both. However, savings are locked in until retirement, except for early withdrawal cases provided by law (primary residence purchase, disability, death of spouse, exhaustion of unemployment benefits, over-indebtedness, judicial liquidation).

Life insurance (assurance-vie)

Life insurance is the ideal complement to the PER. It offers full liquidity (redemption possible at any time), reduced taxation after 8 years (annual allowance of 4,600 euros on gains for a single person, 9,200 euros for a couple), and considerable estate advantages (152,500 euros allowance per beneficiary on premiums paid before age 70).

In retirement, life insurance can be used to supplement income through scheduled partial redemptions, taking advantage of the favorable taxation after 8 years.

The PEA (Plan d'Epargne en Actions)

The PEA is the most performant wrapper over the long term for investing in European equities. After 5 years of holding, gains are exempt from income tax (only social levies of 17.2% apply). The contribution cap is 150,000 euros.

The PEA is particularly suited for savers under 50 who have a long investment horizon and who accept equity market volatility in exchange for a superior return potential.

Rental property investment

Property remains a safe haven in the minds of French investors and provides a good complement for retirement planning. Rental income provides regular supplementary income, and the property can be sold if liquidity is needed.

However, be careful not to overweight property in your assets. Acquisition costs (7-8% for existing property), maintenance charges, vacancy periods and taxation of rental income can significantly reduce net profitability. Financing with a mortgage does offer the advantage of leverage.

The age-based timeline: when to do what

Age 25-35: Lay the foundations

At this age, time is your best ally thanks to the power of compound interest. Even small amounts invested regularly produce spectacular results over 30 to 40 years. Open a PEA and a life insurance policy to start the clock. Begin with modest contributions (100 to 200 euros per month) split between these two wrappers. Favor dynamic investments (global equity ETFs, diversified funds) as your investment horizon is very long.

At this stage, the PER is not necessarily a priority if your TMI is low (0% or 11%). The tax benefit at entry would be modest and withdrawals will be taxed.

Age 35-45: Accelerate savings

Your income generally increases between 35 and 45. Take advantage of this to increase your monthly contributions. If your TMI reaches 30% or above, open a PER and start contributing regularly. Diversify your portfolio: PEA for equities, life insurance for euro funds and unit-linked funds, potentially a first rental property financed with a mortgage.

Carry out your first comprehensive retirement review on info-retraite.fr and check your individual status statement.

Age 45-55: Optimize and gradually de-risk

This is the pivotal period. You still have 10 to 20 years ahead, but it is time to seriously structure your plan. Increase PER contributions if your TMI is high (30%, 41% or 45%). Begin gradually de-risking the most volatile positions by shifting some equities into bonds or euro funds.

Do an annual check with your retirement simulator and adjust your strategy based on how your rights are evolving.

Age 55-65: The final stretch

In the 5 to 10 years before departure, progressively secure your savings. Reduce equity exposure in favor of less volatile assets. Prepare your PER exit strategy (lump sum, annuity or mixed). Simulate the tax impact of different scenarios. Book an appointment with your pension fund for a free retirement information interview (EIR), which must be offered at ages 55 and 60.

Common mistakes that jeopardize retirement

Starting too late

This is the most common and most costly mistake. Delaying the start of savings by 10 years nearly doubles the monthly effort needed to reach the same goal. A saver who starts at 25 with 200 euros per month at an average annual return of 6% has 400,000 euros at 65. To achieve the same capital starting at 35, you would need to contribute 380 euros per month. And starting at 45, you would need 780 euros per month.

Underestimating inflation

Many savers think in current euros without accounting for purchasing power erosion. A target of 300,000 euros in 30 years actually requires aiming for 540,000 euros in nominal terms with 2% annual inflation. Low-return investments (savings accounts, term deposits) do not protect purchasing power over the long term.

Relying solely on the basic pension

The average replacement rate in France is between 50% and 75% of the last salary, with wide disparities depending on profession and scheme. For senior executives whose income exceeds the Social Security ceiling, the replacement rate can fall below 50%. Building supplementary savings is essential to avoid a sharp drop in living standards.

Not diversifying investments

Concentrating all retirement savings in a single asset class (only euro funds, only property, only equities) exposes you to specific risk. Diversification across asset classes (equities, bonds, property, money market) and tax wrappers (PER, life insurance, PEA, securities account) is the best protection against market uncertainties.

Ignoring exit taxation

Good retirement planning also means anticipating the taxation of the withdrawal phase. A PER funded with deducted contributions will be taxed under the progressive income tax scale on lump sum withdrawal. A large one-time withdrawal can result in taxation in the highest brackets. Exit tax planning should begin at least 3 to 5 years before the planned departure date.

Conclusion: a personalized action plan

Retirement planning is not an exact science but an iterative process that becomes more refined year after year. The essential thing is to start as early as possible, even with modest amounts, and progressively increase your savings effort as your income grows.

Start by assessing your current situation on info-retraite.fr, calculate your retirement gap, then put in place a savings strategy suited to your age, risk profile and tax situation. Revisit your plan every year and adjust it based on life events (career change, marriage, birth, inheritance, tax changes).

It is never too early to start planning for retirement, but it is never too late to begin either. Even at 50, 15 years of regular, well-invested savings can considerably improve your future standard of living.

The information contained in this article is provided for informational purposes only and does not constitute personalized financial advice. Consult a wealth management advisor for a strategy tailored to your situation.