When it comes to savings, the French have a few preferences. And sometimes, the performance is not always there, explains BFMTV on its site. Very often, savers in France favor caution and precaution over the necessary risk-taking that could help them grow their savings, Nathalie Cariou points out in our columns. The financial intelligence coach recalls for her part that it is essential to make the change of mentality to go from saver to investor if we hope to win rather than “not to lose”. However, she emphasizes again, we must also realize that the danger is not as great as some might claim.
In order not to take (too) many risks, it is sometimes enough to know what you are doing, she explains. This includes not putting all your eggs in one basket. But what basket are we talking about, exactly? And can we fill it in the same way at all ages? Response elements.
First question to ask, when you are about to start saving around the age of 40: what will be the objective of the latter? Is it to prepare for retirement or even for succession? Are you considering reducing your taxes? The answer will mechanically impact the choice of behavior to apply.
For many in their 40s, the idea of preparing for retirement can be particularly appealing. This must even be the main objective, says economist Florence Legros.
“Preparing for retirement can be done in several ways, but you have to resort to long-term savings anyway, which mechanically limits the choices. When you are 40 years old, you still have almost 60 life expectancy in front of you. And if you want to prepare your succession, the ‘lifespan’ of savings is basically infinite”, observes the director of the ICN Business School. How does this translate concretely in terms of product choice?
“When you are young, and at forty you are still young, you are faced with several problems. One of them, very often, concerns the enlargement of the family. From then on, the choice of good savings seems as important as it is obvious: you have to opt for real estate”, considers Florence Legros from the outset, who nevertheless identifies several possible avenues. “The repayment of the loan, when it does not correspond to the capital part, does not constitute savings. It is service consumption. On the other hand, when we start to reimburse the stone purchased strictly speaking, we build heritage”, further specifies the director of the ICN.
“The second type of savings that must be considered is taking longevity risk into account. It is a form of precautionary savings, which allows the sail to be reduced if necessary. But that necessarily comes after having a roof over your head,” says the specialist. Which also considers retirement savings. But what about life insurance, which is so popular with French women and men?
Life insurance is one of the forms of savings that takes into account the longevity risk mentioned above. However, it is not recommended by Florence Legros. “Other products are more effective. This is the case for retirement savings plans, which are also more readable now, and which companies have generally integrated well into the mandatory annual negotiation. They often help their employees to supplement them”, judges the economist, who does not have much esteem for life insurance in euros; at least in the context of long-term savings.
“We are now entering a period where retirement is less profitable. There will necessarily be a need for a little side, but that cannot be done just anyhow. A classic car, for example, will not do,” she asserts.
