Optimizing personal finances involves allocating every euro of income towards a defined use: current expenses, precautionary savings, long-term investments. In 2024, several regulatory changes will alter the available envelopes and the way they are compared, making some choices clearer than before.
Standardized management profiles in life insurance and PER: what changes in October 2024
Since October 24, 2024, life insurance contracts and retirement savings plans in managed accounts must comply with standardized management profiles. Three categories are now governed by regulatory thresholds for low-risk assets.
- The cautious profile requires at least half of the portfolio to be in low-risk assets.
- The balanced profile sets a floor of about one-third in low-risk assets.
- The dynamic profile demands a minimum of one-fifth in low-risk assets.
Before this harmonization, two contracts labeled “balanced” could have radically different compositions. A saver comparing two insurers had no guarantee of comparing the same thing.
In practice, this standardization allows for choosing a contract based on other criteria (management fees, quality of account units, insurer’s solvency ratio) since the risk structure is now comparable from one contract to another. To delve deeper into the mechanisms of financial management, several resources published on the MoneyWeek finance site detail the trade-offs between envelopes and assets.
PER and minors: the end of a family tax niche
Article 3 of the finance law for 2024 (law n° 2023-1322 of December 29, 2023) prohibits voluntary contributions to a retirement savings plan held by a person under 18 years old. This measure ends a strategy used by some families to reduce their taxable income by housing deductible contributions in a minor’s PER.
The impact primarily affects households in high marginal tax brackets, who could combine the deduction limits of each household member. Since January 2024, this lever no longer exists.
Which envelopes remain open to minors
Life insurance remains accessible without age restrictions for the subscriber (via a legal representative). The climate future savings plan, created by the green industry law, also targets those under 21 with a focus on sustainable assets. Life insurance and the climate future savings plan replace the PER in a long-term family wealth strategy.
Budget planning: structuring cash flows before thinking about investments
No investment compensates for a poorly calibrated budget. Financial planning begins with a precise mapping of monthly cash flows: net income, fixed contractual charges, variable expenses, and the actual balance available.
The most operational method involves physically separating cash flows. One account for fixed charges (rent, insurance, subscriptions), a second for current expenses, a third for automatic savings. This compartmentalization eliminates daily trade-offs and limits overspending in variable categories.
Tracking invisible expenses before increasing your savings rate
Cumulative subscriptions (streaming, apps, delivery services) often represent an underestimated expense. An account statement analyzed line by line over three months is enough to identify forgotten withdrawals. Eliminating unused subscriptions frees up a recurring amount that can be redirected to a savings account or scheduled payment.
Monitoring statements also helps identify insurance duplicates. A mobile insurance policy taken out with the operator and another via the credit card sometimes cover the same risk. This verification takes an hour and produces sustainable savings.
Precautionary savings and wealth objectives: two distinct logics
Precautionary savings cover unforeseen events (breakdowns, temporary loss of income, medical expenses). They must remain liquid and without risk of capital loss. The regulated savings account fulfills this function without fees or taxation on interest.
A common mistake is to accumulate in a savings account well beyond the precautionary need, due to inertia. Beyond a few months of current expenses, the excess in the savings account loses real yield against inflation.
Balancing between euro funds and account units
Once the precautionary cushion is established, the question arises about investing the surplus. Euro funds from life insurance contracts offer a guarantee of capital (net of management fees) and are suitable for a horizon of a few years. Account units expose investors to market volatility but aim for higher returns over the long term.
The ratio between these two assets depends on the investment horizon and the ability to absorb a temporary decline. The standardized profiles mentioned above facilitate this calibration: a saver who chooses a balanced profile now knows that at least one-third of their portfolio remains in low-risk assets, regardless of the insurer.
Every optimization strategy relies on a precise sequence: controlled budget, established precaution, then investments tailored to each objective. The regulatory changes of 2024, particularly the standardization of profiles and the closure of the PER to minors, simplify some choices while closing niches that primarily benefited the best-advised households. Starting from one’s actual situation, not from a theoretical model, remains the first useful step.