To supplement your pension, consider saving young. Then adjust your strategy according to your personal situation.
1) Take charge of your future
It is never too late to worry about retirement. The ideal is to think about it from the age of 40. Twenty years are necessary to build up capital worthy of the name with a reasonable savings effort. Learn about what you will really touch. This is the first step.
There are huge disparities between professions. With a replacement rate (ratio between the estimated retirement and the amount of the last income) which can reach 75%, many civil servants who retire in 2019 or 2020 do not have too much to worry about.
On the other hand, surgeons, architects and lawyers (around 30%) have an interest in having set aside money for their old age. If possible, avoid leaving with a discount. Extending your career to benefit from the full rate is more optimal.
Income Tips: For your retirement, the first step is to save. The younger you start, the less effort will be required. Then think about adjusting your wealth strategy according to the economic situation and your personal situation.
2) Own your home
In times of uncertainty, being the owner of your home is reassuring: 58% of households own their main residence, compared to 33% in 1953. Even if property prices have increased since 2000, buying a roof is a good reflex. Being forced to repay a loan helps build wealth, because the monthly payments include a share of interest, but also of capital.
When you retire, you save the amount of rent, which increases your purchasing power accordingly. The housing budget is “limited” to maintenance costs and local taxes. Be careful not to go into debt too much. The monthly payments must not exceed one third of your income.
3) Consider diversifying your wealth
The best way to prepare for retirement is to build a diverse heritage. Too many savers practice naive diversification. Distributing your life insurance in four or five funds invested in French securities is not enough. Because their performance is likely to be very linked and your contract ultimately not very diversified.
Beware of “familiarity bias”. Investments you know well are not necessarily the most profitable.
4) Invest in life insurance
An investment that responds to a long-term logic. The premiums paid are capitalized over the years based on the profits made. Your savings remain available. Even if, for tax purposes, it is preferable not to make a withdrawal from your contract for eight years.
An investment that escapes tax increases. The life insurance is with the APR and the PEA , the winner of the last fiscal upheaval. Even if it suffered, like all financial products, the increase in social security contributions to 17.2%. Fuel your contracts according to your means and your personal objectives.
5) Don’t forget rental property
The proportion of households owning accommodation that is not their main residence (secondary residence or rental investment ) is 18.5%: 80% of them own their accommodation.
The purchase of housing to rent it is financed for all or part on credit. By investing around 45, you will have repaid the bank fifteen years later and the rents will then complete your retirement.
Prefer the old to the new, 20 to 25% cheaper, for roughly identical rents. The rental profitability (annual rent / purchase price) is therefore better. Especially, if you buy a property to renovate. Because you save on the initial investment and the cost of the work is tax deductible from the rents collected. Better still, if your expenses exceed your property income, the difference is deductible from your overall income up to 10,700 euros per year. Optimize your financing. Loans in fine are to be avoided, except for taxpayers taxed at the higher brackets.
6) Secure your assets after age 65
Risks need to be reduced, both in terms of capital and income. It is also necessary to ensure the liquidity of assets, their availability and to adapt flows to fixed expenses.
Keep your main residence, possibly your second home, that is to say the living environment, and sell the assets to which you are little attached. This results in less management concerns and a reduction in expenses. You can invest in real estate via SCPIs, to ensure regular income by pooling risks.
Obtain regular income through life insurance by setting up scheduled partial redemptions, subject to an attractive tax regime. “There is no age limit for life insurance,” said Charles Meunier, wealth manager near Lyon, author of a study on the main principles of wealth management for the elderly. The important thing is not to subscribe for purely fiscal reasons. The insurance must be random.