One of the most anticipated moments for a worker is retirement. An event that is arriving later and later, since the ordinary retirement age is delayed year after year until 2027, when it is expected to be 67 years for those who have contributed less than 38 years and 6 months. By 2024, workers aged 66 and a half who have contributed less than 38 years will be entitled to receive the benefit. Above this figure, they will be able to retire at 65 years of age.
Although only a few months have passed since the last pension reform was approved, the debate about the sustainability of the system is still alive. In a recent report, the Organization for Economic Cooperation and Development (OECD) called for delaying the retirement age and raising the calculation period for calculating the benefit, from the current 25 years to 40. However, to reach it To materialize this proposal, another major reform would be necessary.
Raising the calculation period to 40 years, explains labor lawyer Ignacio Solsona, would require "also improving the gap integration system", that is, those periods in which the worker has not contributed. In any case, he asserts that it would harm many pensions, since the calculation of the benefit would take into account the stage of youth, "when people have more precarious and unstable jobs."
Solsona, who is also the author of the book Facing Retirement: Tips to Improve Your Pension, remembers that the latest reform, approved last March, gradually changes the benefit calculation period from the current 25 years to 29. The measure, however, will begin to be applied in 2026, so it will not affect workers who retire next year. When it comes into force, a double calculation regime will be established for two decades in which the most beneficial regulatory basis for the future pensioner will be chosen "by default": whether the one calculated from the last 25 years or the one that results to choose the best 27 listed years (324 months) over the last 29 years.
Beyond the effects that this measure may have on future pensioners, the main concerns of those who are close to retirement, says Solsona, is how to face the loss of employment in the last years of their working life and whether they can anticipate the pension without penalizing them too much. In this sense, a frequent question is "if it is better to retire in December 2023 and take advantage of the revaluation or wait for ordinary retirement in 2024," she adds.
As established in Law 21/2021, of December 28, contributory pensions are revalued annually based on the average annual Consumer Price Index (CPI). Last year this update was 8.5%, while the most recent estimates from Social Security place this increase between 3.5% and 4.5% for 2024, although the final figure will be known in the middle from December. Taking the lowest percentage, 3.5%, as a reference, an average retirement pension - of 1,377 euros gross - would rise by 48 euros, to 1,425 euros.
This circumstance opens the door for many workers whose retirement date is near to consider the possibility of requesting their pension before the end of the year to take advantage of the expected revaluation and offset the penalty that would be applied to them for retiring early. However, Solsona warns that "you have to assess which is the best moment individually." However, in general terms it may be more advantageous to retire in the summer of 2024 than in 2023, since the contribution bases for the last 25 years with which the pension will be calculated are revalued one by one based on the CPI, excluding the inflation of the last two years.
Thus, in the case of a person who requests their pension in August 2024, each contribution base used to make the calculation will be updated with the CPI until June 2022, the month in which the interannual inflation rate was 10.2%. On the other hand, if you retired in December 2023, the contribution bases would be updated with the CPI until 2021, the year in which inflation was more modest. In any case, the amount of the contribution bases will have to be taken into account to determine what is more worthwhile, "since there are people with contributions of up to 4,000 gross euros who now contribute 1,500, so each month that passes they lose one good contribution base for another not so good", elucidates the expert.
Another case that generates great concern among workers is how becoming unemployed in the final stretch of their working life will affect their pension. A circumstance that can significantly reduce the contribution bases, which will have a direct effect on the retirement benefit received in the future. One way to remedy this is by signing a special agreement with Social Security, with which the worker can unilaterally pay his contributions and, therefore, maintain his contribution bases. Among the requirements that must be met to benefit from the measure, it is worth highlighting having covered a minimum contribution period of 1,080 days in the 12 years prior to the date on which the Social Security withdrawal occurred.
Herce clarifies that, although there are workers who opt for this solution, it is also true that they must "have economic power" to pay the contributions, especially if they do not come from large companies, they are not part of an Employment Regulation File (ERE). ) and are unemployed, with the consequent reduction in their income that this entails. In this sense, he recalls that those over 52 years of age can apply for unemployment benefits, and in this way the SEPE will pay contributions on their behalf. "In these cases, in general, the pension will suffer, especially if in the first 20 years of working life, or even for three decades, it has been paid for at high bases," says the longevity consultant and author of the book A turns with pensions.
There are also other cases. For example, that of workers who sign separation plans with their companies for which they receive compensation when leaving the company and, in addition, the company agrees to pay for the special agreement until retirement. “Normally, they are workers with maximum contribution bases and economically very powerful companies,” explains Solsona. Other companies include in Employment Regulation Files (ERE) employees who are on the verge of retirement and who, when they exhaust their unemployment benefit, during which time they contribute the same as when they were in the company, then begin to receive the Subsidy for people over 52 years of age until retirement. As the contribution base for this aid is 125% of the minimum limit in force at any given time, if a higher amount was contributed, the pension that the worker would have received if he had not lost his job will be significantly reduced.
For all these reasons, Herce recommends adopting the habit of saving a part of your salary - even if it is 5% or 10% - from your youth, since "money over 30 or 40 years of accumulation and reasonably well managed gives a lot of value." thanks to the magic of compound interest. Likewise, he clarifies that the "most efficient" savings are pension plans or retirement insurance. But, from what age do you recommend subscribing? "The sooner the better," she replies. However, he admits there are other ways to save. For example, she suggests that younger people opt for variable income, although she recognizes that this is also "a good time" to buy fixed income such as Treasury bills, which offer an average interest close to 4%.
