The booklets regain interest
In the wake of inflation and the rise in interest rates, the rates for the livret A and the libretto for sustainable and solidarity development (LDDS) have already risen to 2%. The popular savings account (LEP), reserved for low-income households, even yields 4.6%.
– If the State does not deviate from the official calculation rules, the rate of the livret A and the LDDS should increase again on February 1, 2023, between 2.75% and 3.5%. These remunerations are all the more attractive as they are exempt from tax and social contributions.
– Warning! These investments do not preserve purchasing power, because their rates remain below inflation. While they are useful for growing precautionary or pending investment savings, they are not the best idea for the long term.
Good to know: “Banks should also gradually raise the rates of their bank books (which are themselves subject to tax), and no doubt offer “term accounts” again at attractive rates”, underlines Cyril Blesson, to the Pair Board Savings Notebooks.
Read also> The passbook A rate will increase in February 2023
Life insurance euro funds: capital guaranteed but low gain
In 2021, funds in euros (where the insurer guarantees the capital invested and pays interest) had yielded an average of 1.28%, according to the Banque de France. A derisory level in the face of soaring inflation.
– To prevent savers from withdrawing their capital massively, most insurers should decide to dip into their financial reserves in order to offer a better rate. “The yield for 2022 should thus rise, between 1.60% and 2%, with significant differences depending on the contracts”, predicts Cyrille Chartier-Kastler, founder of the Good Value for Money site.
– Even under these conditions, making new payments on these funds in euros in your life insurance would not be very interesting. Some savers will undoubtedly transfer their savings to other forms of their life insurance contract, such as SCPIs (civil real estate investment companies) or equity funds, without guarantee of the capital invested, but more profitable in the long term. to supplement his retirement, for example.
– Other individuals could decide to leave their life insurance contract, to refer to real estate or savings accounts. But beware of the tax consequences of this choice. The interest withdrawn may be taxed (depending on the amounts and the age of the contract). It is also renouncing the inheritance advantages of life insurance, in particular for the sums placed on a contract before the age of 70. Good to know: “If the French massively withdraw their savings from funds in euros, some insurers may have to manage a tense situation in terms of financial liquidity”, fears Cyrille Chartier-Kastler. As a last resort, the law makes it possible to prohibit withdrawals on certain contracts, for a limited period. But that would compromise the image of life insurance.
Read also> Life insurance: how to boost your performance
Eurocroissance funds, less risky?
“Savers who want to stay in life insurance without taking too many risks should look at the new eurocroissance funds, which offer a good compromise between security and return,” said Yves Gambart de Lignières, independent wealth management adviser. The insurer does not guarantee, of course, to return to you at any time at least the capital paid, but only after eight to ten years (the guarantee sometimes concerns only part of the payments). “This leaves you free to invest more in the stock market to obtain better performance. Returns should be higher than those of euro funds over time,” says the expert.
The promises of the new bond funds
With the rise in interest rates, bonds (loans) issued by companies sometimes yield more than 7% per year. Many management companies have therefore launched so-called “maturity” or “dated” funds, because they buy these securities to keep them for four or five years. On this date, the companies must repay the bonds, which makes it possible to return to savers the capital invested in the fund, plus interest.
– However, it is possible that some companies go bankrupt and do not repay, which would reduce the interest rate. Managers often estimate that the return, net of fees, could be equal to 5% or 6% per year. Provided, of course, that you do not withdraw your savings before the fund matures. Good to know: these “dated” funds are offered from time to time in certain life insurance contracts.
Equities retain long-term strengths
– Investing in equity funds is a good solution for making capital grow for retirement, provided you are aware that a risk of loss accompanies the search for gain. Indeed, this investment generally offers better performance over time than the others. “In 2022, companies have often managed to pass on the increases they suffered from their suppliers in their selling prices. They thus save their margins, their dividends, and therefore their stock market prices”, underlines Cyril Blesson. But will this be able to continue if inflation remains high, interest rate hikes significant, and the economic recession sets in?
Good to know: the stock market is still in danger of being heckled. “Invest your capital gradually, trying to take advantage of periods when it folds”, recommends Yves Gambart de Lignières, independent wealth management advisor. PER, life insurance, equity savings plan (PEA) offer a favorable tax framework for your savings. One or the other may be preferred depending on your profile and your objectives.
The PER reduces tax and inheritance
Launched in 2019, the individual retirement savings plan (PER) has been very successful because it combines several advantages. The sums paid into it are deductible from your income, within a personalized limit indicated on your last tax notice. The higher you are taxed in a higher bracket of the income tax schedule, the greater the savings.
– This savings can only be withdrawn at retirement, except in special cases (death of spouse, end of unemployment benefits, etc.). But, in your PER, you are free to distribute your savings between many funds (equities in particular), or even real estate funds and SCPIs, funds in euros or in eurocroissance…
– Once retired, you have the choice between:
– withdraw your savings at your own pace or convert them into an annuity;
– stop your payments or continue to fund your contract.
– When you recover the sums invested, they are subject to income tax, such as a retirement pension, with a reduction of 10%. The interest or capital gains they have brought in are subject to social security contributions (17.2% today) and 12.8% income tax (unless you prefer to subject them to the progressive scale ). That is 30% maximum.
Read also> Retirement savings plan: at what age should you open it?
Forest, wine, art…
Certain atypical investments such as forests, wine or works of art are more of a dream than the stock market or real estate. But they require skill. The turnkey solutions, offered on the market to neophytes, should be looked at with caution: costs too heavy, investment periods too long, pure and simple scams…
Read also> Investment: investing in a forest, a good idea?
And do not forget…
The inflation rate. Remember to deduct it to determine the real profitability of an investment.