Retiring often results in a loss of income, which worries three out of four working people. The solution: find additional resources. Explanations.
On average, a retiree receives twice less than an employee and his average monthly income, in 2015, amounts to 1,376 euros gross in France, according to the statistical service of the Ministry of Social Affairs (Drees), (2017 edition) . This is why 75% of French people are worried about the level of pension they will receive when they stop working. To compensate for this inevitable loss of income when retiring, 80% of working people believe that seeking additional income is mandatory.
First of all, it is necessary to assess what the amount of the pension will be, then to calculate the level of additional income to be found. This work must be done as soon as possible in order to prepare its heritage today to produce sufficient income tomorrow. Moreover, the need to prepare for retirement emerges from the age of 45. To know its amount, it is generally necessary to make the sum between the basic pension and the supplementary pension, which does not have the same method of calculation according to the plan to which one is affiliated. To learn more, there are several simulators to provide an estimate: the State has for example created one (https://retraitesdeletat.gouv.fr/CalcCivile/), as has the Banque Postale
Many solutions exist to anticipate this drop in income: by making your assets grow, it is possible to build up sufficient capital or create annuities that will fill the gap. Investments dedicated to preparing for retirement such as the Plan d’Epargne Retraite Populaire (PERP), a group insurance contract open to all, is intended to provide the benefit of a life annuity upon effective retirement or normal retirement age. Life insurance is also one of the solutions to consider because this investment allows you to build up additional regular income or a life annuity. It is at the end of the contract that the member decides, if he wishes, to set up regular scheduled redemptions or to convert the capital accumulated on his contract into a life annuity. Another possible solution: open a Savings in Actions (PEA). An investment that can certainly prove to be riskier than the two previous ones, but which can make it possible to get out of it after 8 years with the payment of a life annuity exempt from income tax but subject to social security contributions in force. It is now relevant to reconsider one’s savings decisions and to accept risk-taking adapted to one’s personality, financial situation and investor profile.
Another important pillar for building a solid retirement wealth strategy: stone. In addition to becoming the owner of your main home before leaving your activity, investing in rental real estate is something to consider very early on. Not only does this allow you to diversify your assets, but it also creates additional regular income – the rents collected – which will continue even when you retire. Not to mention that a real estate acquisition enriches a heritage that you can then pass on to your children.
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