Protecting your retirement and health when you start a business
The self-employed owner has weaker social protection than an employee: retirement, contingency cover, daily allowances. How to top up with a retirement plan, contingency cover and health cover, and deduct.
Expert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
Quick answer. The self-employed worker has more limited social protection than an employee: often a lower retirement, capped daily allowances, reduced incapacity and disability cover. To close these gaps, three levers: a retirement savings plan for retirement, a contingency contract for incapacity, disability and death, and supplementary health cover. Contributions to a retirement plan or contingency cover are deductible within certain limits (Tax Code art. 154 bis).
When you leave employment to start a business, you often lose sight of an essential point: the self-employed owner's social protection is markedly less protective. Retirement, sick leave, disability, death: the gaps are real and costly if not anticipated. Here is how to protect your retirement and health when you start a business.
Weaker social protection than employment#
The self-employed owner does not have the same safety net as the employee.
The self-employed worker contributes and acquires rights, but at a level often lower than the employee's: basic and supplementary retirement generally lower for an equivalent income, daily allowances in case of sick leave capped and sometimes subject to a waiting period, limited incapacity, disability and death cover. This gap is the trade-off for lower contributions, but it leaves the owner exposed in case of a setback or at retirement.
It is not inevitable: these gaps are closed by complementary schemes, provided you anticipate them rather than discover them at the time of the problem. The choice of status, self-employed or assimilated employee, also plays a role, a subject linked to the choice between sole proprietorship and company.
Retirement: top up with a retirement plan#
The first gap to close is retirement.
With the self-employed owner's mandatory retirement often lower, the retirement savings plan is the reference tool to top it up. The owner pays contributions, capitalises until retirement, then recovers a capital or an annuity. The tax benefit is twofold: the payments are deductible from income within certain limits (Tax Code art. 154 bis for self-employed payments), which reduces tax during working life. The retirement plan replaced the former dedicated self-employed contracts, closed to new subscriptions, the existing ones being transferable.
The earlier you start, the more the capitalisation effect plays, which makes the retirement plan a reflex to adopt as soon as the activity generates income, in line with the dividend or salary arbitrage.
Contingency cover and health#
Two other schemes protect against life's hazards.
The contingency contract covers the risks of work incapacity, disability and death, where the owner's mandatory cover is weak: it guarantees a replacement income in case of leave, a capital or an annuity in case of disability or death. It is essential protection for an owner whose income depends on their ability to work. The supplementary health cover tops up the reimbursement of medical costs. Contingency contributions can, like the retirement plan, be deductible within certain limits (Tax Code art. 154 bis).
| Risk | Mandatory cover | Complementary scheme |
|---|---|---|
| Retirement | Often low | Retirement savings plan |
| Sick leave | Capped allowances | Contingency contract |
| Disability, death | Limited | Contingency contract |
| Medical costs | Social-security base | Supplementary health cover |
Our view#
Social protection is the blind spot of many founders, focused on developing the activity. Yet a prolonged sick leave with no contingency cover, or an insufficient retirement for lack of savings, can wipe out years of effort.
Our approach is to review the three risks, retirement, leave and disability or death, health, and to top up the mandatory cover with a suitable retirement plan, contingency cover and health cover. The tax benefit of deductible payments makes these schemes all the more relevant as they reduce tax during working life. The right time to deal with it is not later, it is as soon as the activity generates income: contingency cover protects immediately, and the retirement plan capitalises all the better the earlier you start. Anticipating turns a vulnerability into security.
A common case#
An owner, a former employee, had launched their activity without taking out contingency cover, thinking they would deal with it later. A prolonged sick leave left them with very low daily allowances, insufficient to cover their charges. The analysis showed that contingency cover, taken out from launch and deductible within the legal limits, would have guaranteed a replacement income. On recovery, they set up contingency cover, supplementary health cover and a retirement plan, securing both their present and their retirement.
Frequently asked questions
Is the owner's social protection worse?+
Generally yes for a self-employed worker: often lower retirement for an equivalent income, capped daily allowances, limited incapacity, disability and death cover. These gaps are closed by complementary schemes.
How do you top up your retirement?+
Through a retirement savings plan, which lets you capitalise until retirement with a tax benefit: the payments are deductible from income within certain limits (Tax Code art. 154 bis for the self-employed). The plan replaced the former dedicated contracts.
What is a contingency contract?+
It is a contract that covers work incapacity, disability and death, where the owner's mandatory cover is weak. It guarantees a replacement income in case of leave, a capital or an annuity in case of disability or death.
Are the contributions deductible?+
Payments to a retirement plan and contingency contributions can be deductible from professional income within certain limits (Tax Code art. 154 bis for the self-employed worker). This benefit reduces tax during working life.
Do the former dedicated contracts still exist?+
The former dedicated self-employed retirement contracts are closed to new subscriptions, replaced by the retirement savings plan. Existing contracts remain valid and can, under conditions, be transferred to a retirement plan.
When should you deal with your social protection?+
As soon as the activity generates income. Contingency cover protects immediately against hazards, and the retirement plan capitalises all the better the earlier you start. Waiting leaves the owner exposed in case of a setback.
Key takeaways#
- The self-employed owner's social protection is weaker than the employee's.
- The mandatory retirement is topped up by a retirement savings plan, with deductible payments.
- Contingency cover handles incapacity, disability and death, poorly covered by the mandatory scheme.
- Supplementary health cover tops up the reimbursement of medical costs.
- Retirement-plan payments and contingency contributions are deductible within certain limits (Tax Code art. 154 bis).
- Dealing with it as soon as the activity generates income is the right reflex.
Article written by the Hayot Expertise firm, registered with the Order of Chartered Accountants of Ile-de-France. Updated for 2026. This article is for information purposes and does not replace an analysis of your own situation.
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
Regulated French accounting and audit firm based in Paris 8, built to support companies across France with a digital and decision-oriented approach.
Sources
Official and operational sources cited for this page.
This topic is part of our service Wealth planning for business owners in France
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