Retiring in France (#4)  
 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. Unfortunately for them (and for US), UK citizens will no longer be treated as EU country members and their status will have to be negotiated by the UK government (that does not seem to be ready for a negotiation...).

  • Health : you must be covered by a Health program. More about the French health system and read a (very favourable) American opinion about it.

  • 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.

  • Buying property is easy and many real estate agents are specialized in foreign buyers ; a notary is indispensable (to establish the contract and collect the taxes) and his fee is not negotiable.

  • 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 the language.

  • 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. It is not mandatory but it is common to deposit it (in French and totally handwritten) at a notary's office, which will guarantee its authenticity.

  • 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.

  • More to come.

 

 

  

 

(This section is under construction)

The French retirement system

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 52 (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).

  • The situation for French retirees is more favorable than the other European citizen’s (read more about it).

Benefitting from the French Health Plan system ?

It is mandatory for non EU 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
  • 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 than very 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 it is mandatory to 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).

Regions for retirement

The regions with the largest number of homes with foreign retirees are

  • Paris (by far) houses thousands of retireees from all over the world ; many Americans ; property is very expensive (average close to $1,000/sq.fr.)
  • Côte d'Azur (French Riviera) : same, a little cheaper
  • Dordogne : mostly English retirees, sometimes 10% or more of the population in small villages, often elected on the city council (before Brexit) ; property expensive but affordable (read more about the region)
  • the rest of the West (Poitou, Limousin, Brittany) : many opportunities at affordable price
  • the rest of the the country : property often very affordable, few foreign retirees except for English, Swiss, Germans and Dutch (near the borders)
  • More to come...

See numbers of Americans (retired or not) by region according to the last census.

Read The Connexion, an excellent (British) newspaper with news, tons of useful information about France and the French and practical tips for English-speakers who live permanently in France (visit their site)

 

 

Activities.... To be developped

Miscellaneous suggestions :

USEFUL TIPS..... 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 of happiness 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 : these numbers are old but rather stable)
    • 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) ; for people working in the private sector, the age of retirement with a full pension is between 62 and 63 (for civil servants and employees of state-owned companies, it is several years earlier)
    • Netherland : 58,8
    • Belgium : 57,6
    as compared to :
    • USA : 63,6
    • Japan : 66,5
  • The French spend approximately twice more years in retirement than Americans : see detailed figures.
  • The 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.

A very French story : reforming the system...

In 2017, newly elected president Emmanuel Macron announced that the most important reform of his mandate would be a complete reform of the retirement system !click for more details). He organized a two-year concertation between employers organizations, workers unions and the government so that the most difficult issues could be identified before the project goes to the parliament. They met during almost two years under the chairmanship of a member of the governement. After almost two years, the government announced the outline of his project and the unions exploded as if they had never heard of it. Two months of strikes paralyzed the country (all trains and public transport stopped, electricity cuts, harbors blocked, etc), with demonstrations every day. When the strike finally died off, the coronavirus attacked the country and Macron had to announce that he dropped his project in March 2020. (Read about The French and change)

 
To related pages : life in Paris (#1), what Americans like (#2) and meeting the French (#3), intercultural differences, etc...

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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

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