The retirement It 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 contributed less than 37 years and 9 months) and 65 years (for those who have listed more than that amount). However, the system allows for some flexibility, which leads many workers to consider retiring before reaching the standard age.
Reductions by Reaching Before the age of 65
Reaching before the age of 65, although permitted, entails some 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 recovery period, which affects the viability of the system.
The reductions vary according to the time in advance with which it is decided to retire. If, for example, a worker decides to retire at age 63, the reduction in your pension may be around the 8% for each year in advance of ordinary age. It is important to note that these cuts are applied progressively, so that the 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 Pre-retirement refers to situations in which a worker, usually with a prior agreement with his or her company, is withdrawn before the age of 65, but with an agreed financial compensation, which may include public pension coverage through a social security agreement. Such agreements often occur in companies with restructuring plans or in sectors where the elderly of workers is an obstacle to their competitiveness.
In pre-retirement, the worker does not apply for early retirement individually, but is part of a collective process in which the company and the employee reach an agreement. The pre-retirement worker receives financial compensation that allows him to maintain his income level until he reaches 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 that you take into account the following:
- Impact on the pension: As we have mentioned, retiring early means a reduction in the pension. Planning and calculating this impact is crucial.
- Pre-retirement agreements: In cases of pre-retirement, agreement with the company is essential. Make sure you understand the conditions and how they will affect your income and rights.
- Legal advice: To consult with a lawyer specialized in labour and pension law is essential to ensure that you make informed decisions that are not harmful to your economic future.
