Retiring in Spain at 65 with 100% of the benefit is becoming increasingly complicated and that is why many people are turning to early retirement with the aim of being able to retire a few months earlier in exchange for a monthly aid penalty. Ministry of Inclusion, Social Security and Migration In recent years, it has toughened “fines” for those who want to take early retirement and given bonuses to those who extend their working hours. All in an effort to make a pension system that is hanging by a thread viable.
Last August, Spain achieved its record pension spending of 12,828.7 million euros (6.5% more than August 2023) in 10.2 million pensions. These figures have increased after the 3.8% increase planned for 2024 and these data will increase further next year with the expected increase of around 3% in contributory benefits in our country. This and the increase in the number of retirees temper the pension system.
The next arrival of the generation of baby boom (those born between 1958 and 1975) at retirement age as well as the registration of members of the Social security The decline and the problems of birth rate in Spain constitute a cocktail that endangers the state of well-being that has existed in our country for years. So from the Government For years, they have been tightening the conditions for access to ordinary retirement and also toughening the sanctions for those who opt for early retirement. On the contrary, it offers a bonus to those who wish to work beyond the age of 56.
All about early retirement
Retire Spain before age 65 is possible through voluntary early retirement, which offers workers the opportunity to retire before age 65, subject to a series of conditions and other penalties. Those wishing to take early retirement must have contributed to social security for at least 35 years, and two of them must have contributed for at least 15 years before retirement.
Thus, those who wish to retire in 2024 up to 24 months in advance will be able to do so if they have contributed 38 years in their professional life, while those who do not meet these conditions will have to wait until 64 years and six months. These will never be able to receive 100% of the regulatory base since depending on the years of contributions and the date to which you wish to advance retirement, you incur a series of penalties that can range from 2.81% at best to 21% in the following cases. be subtracted from the benefit.
The penalty table if you want to take early retirement
Social Security establishes a series of penalties that depend on the date you want to reduce your pension and the number of months in advance. For example, for people who have contributed up to 44 years and six months and want to retire at 63, they will receive a 13% reduction in their pension benefit. If those who meet these contribution requirements and want to advance one month, their pension will be 2.81%.
The penalties will be heavier for those who are under 38 and have 6 months of contributions. Those who want to advance it by one month will have a penalty of 3.26% while those who want to retire at 63 with these years of contributions, the penalty will be 21% of the total regulatory base.
Bonus if you delay your retirement
He Ministry of Inclusion, Social Security and Migration It also established a series of bonuses for people over 65 who wish to continue contributing to the Social security. All with the aim of making a small savings and giving a break to the retirement piggy bank. These incentives can be of two types and can benefit all types of workers who reach the ordinary retirement age.
- Supplement of 4% on the regulatory base for each full year of contributions after reaching the age of access to ordinary retirement.
- Single payment for each year of delay which can range from 5,000 to 12,000 depending on the amount of the pension and the years of contributions.
- Mixed option to delay retirement by two years.
Regarding this hypothetical aid from the Government, the economist Gonzalo Bernardos warned in The sixth. “Does it pay to be retired longer? Let’s do the math. If they pay me 4% more for each year that I extend my working life, that means that for it to be profitable, I have to live 25 more years after retirement. Be careful, it can come out like that. For women, it can be positive because they have a greater survival, but for men, it is not,” warned the professor of economics at the University University of Barcelona.
