Are you looking forward to a peaceful retirement back in France after a career in the United States? Are you worried that your American social security contributions won’t be included in the calculation of your French pension? Discover how your years spent in the United States will be taken into account in the calculation of your French pension, and optimize your rights to a French retirement.
French expatriate or assignee?
Expatriate and assignee are two terms often used in the context of international mobility, but they refer to very different situations. An expatriate moves to another country and severs their ties with the French social security system to join the system of the host country. An expatriate therefore has a local employment contract (in the United States, for example) that is subject to the laws and regulations of the host country, including taxation and social security.
An assignee is an employee based in France, sent by their company to carry out a temporary assignment abroad. They retain their French employment contract and therefore remain affiliated with the French social security system. The assignee also retains their French social and tax rights.”
How does the French Sécurité Sociale take into account my work periods in the United States?
Thanks to the French-American Social Security Agreement, periods worked in the United States are taken into account when calculating your French retirement. When you apply for retirement, the French social security system will request the transfer of your rights acquired in the United States to supplement your French pension.
Watch out! Important details
Despite the agreement signed between the United States and France, there are several important points to remember in order to make the most of your retirement:
- Best 25 years in France: The calculation of the French pension is based solely on the salary of the best 25 years earned in France. The amount of your pension earned abroad will not be taken into account for the calculation of your French pension.
- Only the most advantageous period abroad is retained: Unfortunately, it is not possible to combine periods spent in several foreign countries*. If you have worked in several countries that have signed an agreement with France, the French sécurité sociale will calculate the periods spent in each country, and only the most advantageous will be retained.
*Caisse des Français à l’Étranger (CFE)
If you have worked in several foreign countries, or a country that does not have a social security agreement with France, you can turn to the Caisse des Français à l’Étranger (CFE) as a way to make up the difference. The CFE allows you to continue to contribute French trimestres in order to receive a full rate French retirement.
How about additional retirement accounts, like a 401(k) or IRA?
Your American retirement accounts (401(k), IRA, etc.) are not used in the calculation of your French pension, as these are additional investments outside of the American retirement contribution system (Social Security). It is therefore essential to closely monitor their management and ensure access to them in retirement. Thanks to the Franco-American tax agreement, these accounts benefit from advantageous taxation in France, and therefore represent a very interesting asset when returning to France. However, we recommend you contact one of our specialized cross-border advisors who will help you optimize your retirement planning and avoid unpleasant surprises or costly mistakes.
It’s never too early to plan your return to France!
Returning to France is a significant step that raises many questions, both personally and financially. Today, international tax regulations of the US IRS and the French tax authorities are much more complex, making personalized financial support essential. With our extensive experience assisting expatriates, our advisors in Nice and Bordeaux can guide you for a smooth return to France. Harrison Brook is here to listen and answer all your questions, so don’t hesitate to schedule a free consultation with us.
A Harrison Brook Cross-Border Financial Advisor is here to help
- Knowledge and experience with American and French financial products such as 401k, IRAs, and assurance vie
- Has necessary qualifications and licenses, both in the US and in France
- Has a good understanding of the cross-border tax issues
- Based locally in France and available to meet in person
- Has a good reputation and clean background
- Experienced in helping clients in my situation
- Native US speaker, but also fully bilingual in French
