Spain makes receiving full pension while working possible

The Spanish government has announced significant reforms to the pension system, aimed at encouraging older workers to extend their careers voluntarily. The Ministry of Inclusion, Social Security, and Migration has reached an agreement with unions and employers to implement these changes, primarily through royal decrees.

Under the new regulations, workers can now earn 100% of their pension while continuing to work, provided they extend their employment by one year beyond the standard retirement age. This change will be gradually implemented. Therefore, allowing retirees to receive a higher percentage of their pension each year until they reach 100% by age 71.

Improved partial retirement

The reform introduces two types of partial retirement: general and specific to the manufacturing industry. The general option is available to all sectors from the age of 62, provided they meet certain conditions such as having 33 years of contributions and six years with their current employer. This allows for a phased retirement, reducing working hours up to 75% in the final years.

Encouragement for delayed retirement

To make delayed retirement more attractive, the reform offers an additional 2% pension increase for every six months of delay beyond the second year. This is on top of the existing 4% increase for each additional year of work.

Special provisions for difficult jobs

The government will modify the rules to lower the retirement age for those in particularly strenuous, toxic, hazardous, or unhealthy occupations. This change is expected to be implemented by the end of 2024, ensuring workers in these fields can retire earlier without a pension reduction when job conditions cannot be improved.

Enhancing flexible retirement

Within six months, the government will review and improve the flexible retirement regulations to incentivise its uptake. This will enhance the pension percentage for salaried workers opting for flexible retirement.

Also read: Senior co-living, new living trend for elderly people with money in Spain