Pillar 3, Swiss retirement plan and French life insurance: what solution for a cross-border worker?

The choice between the French PER, the Swiss 3rd pillar (A and B), and the French life insurance depends on the cross-border worker's tax situation, the canton of work, and wealth management objectives: retirement optimization, tax reduction, flexibility in savings, or wealth transfer.

Tax status of cross-border workers: Geneva vs other cantons

Cross-border workers Geneva: Withholding tax in the canton, possibility of quasi-resident status (if 90% of household income is taxed in Switzerland), allowing access to the tax deduction for the 3rd pillar (A or, more rarely, B).

Other Swiss cantons: income tax in France, no tax deduction on the 3rd pillar but tax advantage upon withdrawal, just like French life insurance, which grants tax benefits on French territory. The Swiss 3rd pillar (A and B).

Swiss 3rd pillar (A and B) for cross-border workers

3rd pillar A: accessible as a cross-border worker taxed in Geneva (quasi-resident), capped at CHF 7'258 (employee) or CHF 36'288 (self-employed). Funds can be unlocked from the age of 60, upon purchasing a primary residence, transitioning to self-employment, permanent departure from Switzerland, or in case of disability or death. 

3rd pillar B: more flexible, but without tax deduction upon entry for most cross-border workers. It resembles a free savings account, in the form of life insurance in Liechtenstein.

Taxation upon withdrawal: for pillar A, the capital withdrawn is taxed at 6.75% in France as retirement capital. For pillar B, the capital is taxed according to French life insurance rules, if the contract is classified as such (especially in the case of a foreign contract like Liechtenstein).

Investment universe: the Swiss 3rd pillar offers a wide range of investment options (ETFs, stocks, bonds, gold…), a high potential return, and protection in case of death or disability. 

Suitable for all cross-border workers, even without a tax deduction, to prepare for a long-term project (children's education, real estate purchase) or retirement. 

French PER (Retirement Savings Plan)

The PER is mainly aimed at cross-border workers taxed in France. The contributions made are deductible from taxable income within the annual limit set by French legislation.

Funds are generally locked until retirement, except for exceptional cases (purchase of a primary residence, disability, death of a spouse, etc.).

Upon withdrawal, the taxation depends on the chosen form: annuity or capital.

For a retired resident in France, the portion of capital is subject to income tax, while generated products are taxed at the flat tax rate (PFU) of 30%.

Although the PER is interesting for the tax deduction upon entry, it remains more rigid than the 3rd pillar or life insurance. Its taxation upon withdrawal can also be heavier, especially for high incomes.

French life insurance

Life insurance remains a particularly flexible and suitable solution for cross-border workers. Withdrawals can be made at any time, making it an excellent tool for medium and long-term savings.

After eight years, the taxation becomes very advantageous due to an annual allowance on capital gains of €4,600 for a single person and €9,200 for a couple, before applying the PFU of 24.7%.

In case of death, the transfer also benefits from an allowance of €152,500 per beneficiary before the age of 70, making it a complete wealth management tool.

Life insurance is suitable for both cross-border workers taxed in Switzerland and those taxed in France. It perfectly complements a 3rd pillar or a PER to build a balanced strategy between returns, taxation, and transfer.

For amounts exceeding €250,000, it is even possible to opt for a Luxembourg life insurance, which offers better legal protection and greater investment freedom.

Comparative table of solutions

Which solution to choose according to your situation? 

Taxed in France: 3rd pillar A or B for its advantageous taxation upon withdrawal, PER for the tax deduction, and French life insurance for flexibility.

Quasi-resident in Geneva: 3rd pillar A and B for taxation on income, French life insurance as a complement for flexibility.

Security profile: Swiss 3rd pillar.

Return-oriented profile: Swiss 3rd pillar and French life insurance.

Flexibility: French life insurance allows for adaptable management and withdrawals at any time. 

Each solution has specific advantages depending on your tax status, objectives, and investment horizon. By combining several systems, it is possible to optimize retirement, taxation, and the transfer of your wealth.

Before making a choice, it is essential to carry out a personalized analysis of your situation to identify the strategy most suited to your cross-border worker profile.