Retirement Before the age of 65: Early retirement and pre-retirement in Spain
Retirement is a right that all workers in Spain acquire when they reach the legal age set for it, but the way to that time is full of legal and economic aspects that must be clearly understood. In this article, we analyse the implications of retiring before the age of 65, the reductions that can be applied in such cases and the concept of pre-retirement, which has become relevant in recent years.
The Age of Retirement in Spain
In Spain, the retirement age has been increasing progressively due to pension reform. At present, the legal retirement age is set at 66 years and 4 months (for those who have listed less than 37 years and 9 months) and 65 years (for those who have listed more than that amount).
However, the system allows certain flexibilitieswhich leads many workers to consider retiring before reaching the standard age.
Reductions by Reaching Before the age of 65
Reaching before age 65, although allowed, involves Penalties in the amount of the pension. These reductions are applied to maintain the financial balance of the public pension system, as an early pension involves a longer period of recovery, which affects the viability of the system.
The reductions vary according to the time in advance with which it is decided to retire. For example, if a worker decides to retire from the 63 years, the reduction in your pension may be around the 8% per year in advance with respect to the ordinary age.
It is important to note that these cuts are applied in a way progressivethe amount of the pension will be reduced according to the number of years of advance over the legal age.
Preretirement: Concept and Characteristics
The concept of pre-retirement is different from early retirement. Pre-retirement refers to situations in which a worker, usually with a prior agreement with your companybefore age 65, but with a economic compensation agreedwhich may include public pension coverage through an agreement with the Social Security.
This type of agreement usually occurs in companies with restructuring or in sectors where the elderly of workers is an obstacle to competitiveness.
In pre-retirement, the worker does not apply for early retirement individually, but is part of a collective process where the company and the employee reach an agreement. The pre-retired worker receives a economic compensation which allows you to maintain your income level until you reach the legal retirement age.
What should you know when considering early retirement or pre-retirement
If you are considering retiring before age 65 or entering a pre-retirement process, it is essential to take into account the following:
Impact on the pension: As mentioned above, retiring early implies a reduction in the pension. Planning and calculating this impact is fundamental.
Pre-retirement agreements: In pre-retirement cases, agreement with the company is key. Make sure you understand your conditions and how they will affect your income and rights.
Legal advice: Consulting with a lawyer specialized in labour and pension law is essential for making informed decisions and protecting your economic future.
