PER Exit Tax Simulator

PER exit taxation depends on a crucial choice made at entry: did you deduct your contributions from your taxable income?

• Contributions deducted at entry (most common case): At withdrawal, premiums are taxed under the progressive income-tax scale (retirement TMI) and gains are subject to income tax plus social charges (17.2%).
• Contributions not deducted at entry: Premiums are tax-free at withdrawal. Only gains are subject to the flat tax (PFU) of 12.8% plus social charges (17.2%).

Formula (deducted contributions): Tax = Premiums x TMI + Gains x (TMI + 17.2%)

Formula (non-deducted contributions): Tax = Gains x (12.8% + 17.2%)

The French Retirement Savings Plan (PER) offers three withdrawal options at retirement, each subject to a distinct tax regime. Understanding these mechanisms is essential for anticipating the net amount you will actually receive and choosing the most advantageous strategy for your personal situation.

Lump-sum capital withdrawal

When you opt for a lump-sum withdrawal, taxation breaks down into two distinct components. On one hand, contributions (premiums) that you deducted from your taxable income at entry are subject to the progressive income-tax scale upon withdrawal. Specifically, these amounts are added to your other income for the year and taxed at your marginal tax bracket (TMI): 0%, 11%, 30%, 41% or 45%. On the other hand, capital gains generated by your savings are subject to the flat tax (PFU) of 30% -- 12.8% income tax and 17.2% social charges. This flat tax applies uniformly regardless of your income level.

For example, for a PER worth 150,000 euros consisting of 100,000 euros of deducted contributions and 50,000 euros of gains, a retiree in the 11% bracket would pay 11,000 euros of income tax on the premiums and 15,000 euros of PFU on the gains, for a total tax of 26,000 euros and a net capital of 124,000 euros.

Life annuity withdrawal

A life annuity from a PER whose contributions were deducted is taxed as a retirement pension. It is subject to the progressive income-tax scale after a 10% allowance (capped at 4,321 euros per tax household in 2026). Social charges of 17.2% also apply to the annuity.

For contributions not deducted at entry, the annuity is taxed under the regime for annuities for valuable consideration. Only a fraction of the annuity is then subject to tax, this fraction varying according to the annuitant's age at the time of annuity commencement: 70% of the annuity is taxable if the annuitant is under 50, 50% between 50 and 59, 40% between 60 and 69, and only 30% at 70 or older. This mechanism can make annuity withdrawal very tax-friendly for late retirements.

Mixed withdrawal: capital plus annuity

The PER allows you to combine both withdrawal methods in whatever proportions you choose. For example, you could withdraw 50% as a lump sum to fund an immediate project (loan repayment, renovations, gift) and convert the remaining 50% into a life annuity to secure a regular income for life. Each portion is then subject to its own tax regime. This flexibility, introduced by the PACTE law, is a major advantage of the PER over older retirement savings products like the PERP or Madelin contract, which generally required mandatory annuity withdrawal (with limited exceptions).

PER exit taxation can represent a significant portion of your savings. Several strategies can considerably reduce it, provided you plan ahead and carefully schedule your withdrawals.

Spreading the lump-sum withdrawal over several years

The most effective strategy is to spread your withdrawals over several tax years. The PER allows scheduled partial withdrawals, which lets you smooth the impact on your tax bracket. For example, instead of withdrawing 150,000 euros at once (which could push you into the 30% or even 41% bracket), you could withdraw 30,000 euros per year for five years to stay in the 11% bracket. The tax saving can amount to several thousand euros.

This approach is particularly relevant in the early years of retirement, when your income is naturally lower and your TMI is at its lowest. You should simulate each year the optimal amount to withdraw based on your other income (retirement pension, rental income, etc.) to avoid crossing into the next bracket.

Anticipating the TMI drop at retirement

Most retirees experience a significant drop in income, and therefore TMI, upon retirement. If you are at 30% TMI while working but will drop to 11% in retirement, the PER's tax advantage is maximised: you deducted your contributions at 30% and will be taxed at withdrawal at only 11%. This rate differential is the true optimisation lever of the PER. It is therefore crucial to estimate your future TMI before deciding on the timing and method of withdrawal.

The special case of non-deducted PER (article 150-0 A of the CGI)

If you chose not to deduct your contributions at entry (a possible but lesser-known option), the exit taxation is radically different. Your premiums are returned without any income tax, and only gains are subject to the 30% flat tax. This option is particularly advantageous for taxpayers whose TMI does not change between working life and retirement (stable TMI at 11%, for example), or for those who anticipate a TMI increase at retirement (significant rental income, for example).

By combining deducted and non-deducted contributions within the same PER, you can finely optimise your overall taxation. Each compartment is treated separately at withdrawal, offering great management flexibility. It is recommended to keep precise records of the nature of each contribution to facilitate the tax calculation at withdrawal.

The PER exit is when the tax planning carried out during the savings phase pays off. Several strategies can minimise the overall tax burden and maximise the capital actually received. Each approach must be evaluated based on your personal situation, your retirement income and your cash-flow needs.

Capital or annuity: how to choose?

The choice between lump-sum and annuity withdrawal depends on several factors. The lump sum is generally more advantageous when your TMI at retirement is low (0% or 11%), as the tax on premiums remains moderate. It is also preferable if you have a specific project to fund (renovations, helping a child, gift) or if you wish to reinvest the capital in a higher-performing vehicle. Conversely, the life annuity offers lifelong financial security, which is particularly valuable for retirees with a long life expectancy and no income-generating property. The annuity is often more tax-efficient for non-deducted contributions, thanks to the reduced taxable fraction that varies by age at commencement.

Splitting: the most effective strategy for reducing tax

Splitting the lump-sum withdrawal over multiple tax years is the most powerful optimisation strategy. Its principle is simple: by spreading withdrawals, you avoid pushing your entire capital into a higher tax bracket. Ideally, calculate each year the maximum amount you can withdraw without crossing into the next bracket. For example, a retiree receiving 18,000 euros in pension income whose PER contains 120,000 euros of deducted premiums can withdraw approximately 11,000 euros per year without exceeding the 11% bracket limit (for a single person in 2026). Over ten years, they will have recovered all their premiums with an effective tax rate of just 11%, instead of jumping to the 30% bracket with a single withdrawal.

The impact of retirement TMI on exit strategy

Your marginal tax bracket at retirement is the determining factor for optimisation. If your TMI drops from 30% while working to 11% in retirement, the 19-point differential represents the net gain of the PER mechanism on deducted premiums. However, you must factor all your income into the calculation: basic and supplementary retirement pensions, rental income, investment income and the PER withdrawals themselves, which are added to your other income to determine your effective TMI. Some retirees discover that combining their pension with a large PER withdrawal pushes them into the 30% bracket, considerably reducing the expected advantage.

Optimising the timing of withdrawals

The timing of your withdrawals has a direct impact on taxation. The first years of retirement are often the most favourable, as your income is at its lowest (not yet receiving full supplementary pension, no employment income). It is also wise to plan withdrawals taking into account years when your other income is lower (no exceptional rental income, no property capital gains). Finally, for couples, it may be optimal to prioritise withdrawals from the PER of the spouse with the lower TMI, even if taxation is joint, because the progressive scale applied to lower income generates less overall tax.