| Basic check-list for
would-be retirees in France
|| Investing in France : a few tips
For many foreigners, retiring
in France may seem appealing. Indeed it may be a good idea but
it must be carefully studied. Among the issues to consider :
EU or not EU : everything is much simpler if you
are a citizen of a EU country because of the high number of reciprocity
treaties covering most fields (taxes, health, diplomas, etc).
If you are American, it's more difficult.
Health : you must be covered by a Health program. More
about the French health system and read
a (very favourable) American opinion
Working : you can work as a consultant ("travailleur
indépendant " or "auto-entrepreneur") but do not underestimate the complexity
of the process. You must have a "carte de travail "
(working permit) and be affiliated to health ("Sécurité
Sociale") and retirement ("URSSAF") organizations.
Check everything with a specialist.
Taxes : you must pay French
taxes, even on income made outside France
Community life : EU citizens can vote and be elected
in local elections ; others cannot (but President Hollande elected in 2012 said he would make it possible for non-EU citizens).
Buying property is easy
and many real estate agents are specialized in foreign buyers
Language : are you ready to learn French and
use it daily? Do you wish to have French friends and share their
way of life? Your stay will be enourmously enriched by learning
If you need help for administrative tasks : Imagic2015 provides the best service for foreigners, guiding them through French administration processes in a smooth and serene manner (Administrative forms assistance, secretarial tasks, writing, …)
And now a question : Who is the very first person to meet if you decide to settle in a French village?Click here for the answer.
If you die in France .... Of course you won't have problems any longer but your spouse or your heirs might. One thing to remember : it is generally useless to see an American lawyer
but it is absolutely mandatory to see a notary. By law, only notaries can manage an estate, pay the taxes on your behalf and carry out all the legal formalities. And remember that, to be valid in France, a will must in French and totally handwritten. It is not mandatory but it is common to deposit it at a notary's office, which will guarantee its authenticity. Once again, a US lawyer is not useful.
More to come.
(This section is under construction)
The French retirement
In France, the general rule is
that you must retire at age 67 and you can retire from age 62,
as long as you have worked 41 (now) then 42 years. According
to a 2008-law, which was strongly opposed by the Left, you are
now permitted to retire later (until age 70) , but only if you
wish. However, in some professions, people can retire with full pension as early
as 55 (public transport) or even 50 (bus or train drivers, miners,...)
and many early retirement public programs have been established.
Women gain two years per child. After big strikes, it has been
decided in 2003 that civil servants, who needed only 37,5 years
work when private sector needed 40 would follow the general rule (but very progressively). In October 2010, in spite of huge strikes, the system was changed and the ages were modified from 60 to 62 (minimum age) and from 65 to 67 (normal age).
The pension system in France :
For all salaried workers and
civil servants : a national system which grants 50 to 55 % of
the income (if you have worked 41 years) This system is totally
different from the US system. It adds a Social
Security pension and a system of Retraite Complémentaire.
Everybody is entitled to the first one, which is based on the
concept of "repartition", instead of "capitalization".
Each year, it distributes what has been collected among active
people : it is, therefore, sensitive to demography and employment
(less people, less money) but disconnected from the financial
market (which makes sense, these days...). Read more
about it. The second one concerns mostly "cadres"
i.e. people over a certain income, and is also based on "repartition" and therefore totally independent of the future
of the companies you worked for.
Plus : corporate plans or personal
plans (close to the American system of "capitalization") depending on the company.
For the French it is just unthinkable that the pension you get could depend on the failure of your
employer or past employer (nobody could believe the Enron story).
- The demography being what it
is in Europe (weak and relatively high unemployment),
maintaining the current level of pension is at stake and will
be one of the major issues of European governements for the years
to come. Although the demography in France is one the most dynamic in Europe, French governments have been trying to make changes
in the system to adjust it to demography and economy, through
a very painful process, with huge strikes : increasing the number
of working years for the private sector from 37,5 to 40 (1993),
trying in vain to extend it to the public sector (1995) and finally
succeeding (2003), trying to put an end to the "régimes
spéciaux" which are very advantageous exceptions
to the system (2007).
Benefitting from the French Health Plan system ?
It is possible for foreign retirees to join the national Health Plan system (Securite Sociale) and have access to the Protection Universelle Maladie (PUMA, formerly called Couverture Maladie Universelle). The modalities and the pricing depend on the nationality of the applicant and the bilateral treaty between his/her country and France. You can get the information by contacting the department of Securite Sociale in charge of foreign applicants (CLEISS tel 33-1 45 26 33 41 or its site, partly in English) or the site of the Caisse nationale d'Assurance maladie. Do not expect it to be simple . . .
For US citizens :
The administrative body to consult is the CLEISSS(Centre de Liaisons Européennes et Internationales de Sécurité Sociale, 11 Rue de la Tour des Dames Paris 75009 Tel. 33-(0)1 45 26 33 41
- Check with the Federal Benefits
Units at the US Embassy in Paris : you can cumulate (partly)
US and French benefits (there is a bilateral agreement) but it
is very complicated and it often changes. About the French (minimum) pension system, check the CNAV site.
- Read our page on the five US communities in France
- Read "Vital Issues : How
to Survive Officialdom While Living in France", regularly
updated by AAWE
- visit the Retire Europe site
Retiring in France and taxes
If you decide to settle in France permanently and become a French resident, you'll have to become à taxpayer in France. Of course, you'll pay taxes on the products you buy (the VAT), on the property you rent (taxe d'habitation) or you own (taxe fonciere etc.) but also you'll have to pay the income tax (on any level and any form of income, in France or abroad) and the tax on wealth (ISF : impot sur la fortune, above 1.3 million Euros total assets). This is the French law: all citizens living in France are taxpayers in France. Paying tax is associated with residence.
- See figures about the huge
difference between the system for employees of private companies
and the (very advantageous) system for civil servants and employees
of public utilities. At a big political cost, president Sarkozy
reformed it toward a (slow) convergence of the two systems (2008).
In 2014, the Socialist government voted the Hardness Law on retirement : if your job is particularly hard, you can retire earlier. But how do you measure hardness? Read what happened to this unenforceable law (among others).
More to come
USEFUL TIP . . . Filing for taxes is easy in France and, other thanvery rich people, very lazy people and people with a very complicated form of income or wealth, very few people need to pay someone to help them to file. It takes only a few minutes and a large majority of people do it online. Nothing in common with the craziness of American tax bureaucrats who, with so many ridiculously complicated tax forms and tax laws, deliberately push taxpayers in the arms of various lawyers, tax advisors and accountants.
But : prospective retirees in France, beware of FATCA! The US law is different from the French law : all US citizens are US taxpayers, wherever they live. Paying tax is associated with citizenship. From July 2014, for all US citizens living in France, the US Foreign Assets Tax Compliance Act requires all US citizens to declare all their bank accounts and financial assets worldwide and of course all their income. This creates many constraints for non-American banks and many of them prefer to close the accounts of their American customers. Read my column about it.
This is a pathetic example of the way American lawmakers mistreat their compatriots living abroad (read more about it).
DID YOU KNOW THAT . . . ? Taxwise, the US situation is almost unique : except Erithrea (and maybe Russia), the USA is the only country in the world which considers double taxation as unavoidable : all the other countries base their taxes on residence and not on citizenship. Even if Section 911 of the US Tax Code grants an exemption for income below a threshold (currently : $95,000), it is taxable above that amount and the threshold could change any day read more about extraterritoriality).
Activities.... To be developped
Miscellaneous suggestions :
Most universities offer a program called "Université
du Troisième Age" (University for Seniors) : they
are generally quite good. In most cities, there is a "Maison
des Associations" which is an information center and a meeting
place for most associations, for all kinds of hobbies. Like in
the US, if you are over 60 or 65, you qualify for many small
benefits : a Carte Senior (25% off on trains), a reduced fee
on urban public transport (but not in Paris), a reduced or free
access to many museums, you pay no yearly TV tax (if over 70),
etc... In 2008, an interesting survey established that the feeling
is maximum between age 65 and age 70 : people enjoy being retired
A few facts and figures ....
- Average age at which men stop working in various
countries (Source : OECD 1995)
as compared to :
- UK : 63,6
- Sweden : 63,3
- Spain : 61,6
- Italy : 60,6
- Germany : 60,5
- France : 59,2 (only 15% of people between age 60 and
65 are still working : the lowest % in Europe)
- Netherland : 58,8
- Belgium : 57,6
- The French spend approximately twice more years in retirement than Americans : see detailed figures.
French pension system " retraite par répartition
" illustrates that the French prefer a social (redistributing)
mechanism to an economic (investing) process. The French system
has not much in common with the U.S. system : it is based on
the idea that the money collected among active people is not
invested but immediately redistributed to retired people.
- Pros : The system is by nature
independent from inflation and from the stock market and retirees
can go without harm through any economic or social crisis
- Cons : it is sensitive to declining
demography and to the increase of longevity, which deteriorate
the ratio (contributing actives) / (benefitting retirees)
- Pension systems similar to what
Americans are familiar with do exist ("retraite par capitalisation
" i.e. pension funds) but they contribute to a smaller part
of the income of retirees and moreover, their development is
very strongly opposed by the left wing, for which it is considered
a typical example of "globalization".
- At the death of a spouse, the surviving spouse is entitled to "pension de reversion" i.e. unless the survivor already benefits from a high pension (this maximum level varies) he/she receives HALF of the pension of the deceased until his/her own death.
|To related pages : life in Paris (#1), to what Americans
like (#2) and to meeting the
French (#3), intercultural
of the page
Back to home
For more on intercultural
differences, order Harriet Welty Rochefort's books :
- "Joie de Vivre", Secrets of Wining, Dining and Romancing like the French, St.Martin's Press, New York, 2012
- "French Toast, An American in Paris
Celebrates The Maddening Mysteries of the French", St.Martin's Press,
New York, 1999
- "French Fried, The Culinary Capers
of An American in Paris", St.Martin's Press, New York, 2001
More on Harriet's books (excerpts, upcoming
events, testimonials, etc..)
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