Going into retirement is a step that needs to be prepared for; many things must be taken into account (such as your income, your expenses, the age at which you will receive the full rate for calculating your retirement…).
So many things to consider that we need to be able to find it.
You may also like : How to calculate your net salary from a gross salary of €2800?
Calculating your retirement in advance is a good way to anticipate it. However, this is not the only thing to do; the retirement preparation article will allow you to delve deeper into the matter.
What is included in the calculation?
To begin with, it is necessary to know at what age you can retire.
Related reading : How to Choose Your Front Door?
The retirement age depends on your year of birth.
For example, if you were born in 1955, this date gives you the legal retirement age of 62.
It is important to note that retirement pensions are adjusted on January 1st of each year. The rate varies depending on inflation.
Additionally, having your career statement will help you calculate the amount of your retirement and the rights you can earn.
You can fill out this document with your pay slips to justify the amounts.
Next, to calculate your retirement, there are different formulas depending on the scheme to which you are affiliated:
- private sector employee,
- public sector employee,
- self-employed professional,
- artisan…
Knowing that for artisans, merchants, and private sector employees, the formula is the same.
For private sector employees, merchants, and artisans, the calculation formula is as follows:
- the average annual salary is based on the average of the 25 best years of earnings. If you have contributed to two different schemes, that is, for 10 years for the self-employed (RSI now SSI) and 35 years in the employee scheme (Social Security), the consideration of the 25 best years in terms of salary is done proportionally to the time spent in each scheme. It should be noted that, in all cases, the average annual salary taken into account for calculating your basic pension cannot exceed the annual Social Security ceiling of 40,524 euros for 2019.
- the pension rate is based on the number of validated quarters: if you have validated all your quarters, then this rate will be 50%, known as the full rate. If you have validated fewer quarters, your rate will decrease accordingly (the so-called discount).
- the duration of insurance is based on the number of quarters you have acquired.
- This differs from the quarters for which you have contributed. The quarters for which you have contributed are those that entitle you to payment. You are also entitled to specific quarters automatically, such as unemployment, military service, or births (if you have a child, for example, you can receive up to 8 additional quarters), these are validated quarters. The last element of this calculation is the ratio of the numerator, the number of quarters completed, to the denominator, the number of reference quarters (for full-rate retirement).
For public sector employees:
- Gross index salary: we are talking about your last job, held for at least 6 months before the cessation of your activity.
- Reduction or increase coefficient: if you have not contributed enough to have a full-rate retirement or conversely if you have validated more quarters than required, you will have an adjustment coefficient or a reciprocal overvaluation. Other factors can give you an additional score, such as having children.
- Liquidation percentage: rate calculated based on the liquidable services (services performed as a real civil servant) and the additional quarters granted. This rate is set for a maximum of 75%.
For self-employed professionals:
- total number of points obtained: points awarded in exchange for contributions.
- value of the retirement point: the retirement point has a value set by decree; for 2019 it is 0.5690 euros.
- the pension rate depends on the duration of insurance during which you have paid. If you have reached the maximum duration, your rate is 100%. Otherwise, there will be a reduction or deduction (if you have contributed more than the minimum required). This term in the equation works the same way as for the employee system.
On the official website of your retirement account, you have access to a specific simulator: https://www.info-retraite.fr/portail-services/#/login#header Conducting a retirement audit will be of great help and will allow you to make an accurate calculation of your retirement amount and know your future budget so that you can retire with peace of mind.
What is the full rate?
The full rate is the rate that applies at 50% if you have validated every required quarter, also known as the maximum rate.
If you have not been able to validate all the quarters, then we will apply a reduction or conversely an increase.
The rate of 0.75% per additional quarter is applied for the reduction; it will be 1.25% per missing quarter in case of a discount.
The impact of cuts and surrounding factors
If you cannot qualify for the full rate because you have not validated all your quarters, you will apply a discount, which is thus a reduction in the amount of the pension.
The reduction is made as a percentage based on the number of missing quarters or missing points.
The case of overvaluation is the opposite of the previous situation. Indeed, you have reached the minimum retirement age to benefit from the full rate.
If you continue to work and thus contribute, it will apply the increase. We will then increase the amount of the pension.
When are your quarters?
The concept of a quarter is at the heart of the retirement pension calculation.
We are talking about quarterly validation, meaning that in a year, there are 4 contribution quarters.
Depending on your salary and family situation as well as your working hours, you will or will not complete these 4 quarters in the year and each year.
The hourly minimum wage to validate a quarter is 10 euros and 3 cents. With 6,018 euros, 4 quarters are thus validated, for example.
To validate these quarters, we therefore look at years of employment, assimilated periods (involuntary interruption of work), periods validated by presumption, or quarters repurchased.
We have seen that if you have not reached the minimum number of quarters, we will apply a reduction. It is possible to compensate for this by repurchasing quarters.
What can you act on?
The only leverage possible to act on the amount of your retirement pension is the duration of contribution or the duration of insurance.
Only by playing on the validation of quarters can you increase your pension by validating more than the minimum required.
The Patrimoine eye of CGP ONE
Our retirement system is complex, with many schemes with different funds and different calculation methods… difficult to navigate.
Our experts are here to help you estimate your future rights and project different scenarios.
Tag: when to retire