For many, early retirement is an unattainable dream. Normally, they are carried out by large companies or multinationals (especially in sectors such as industrial, mass consumption or the financial sector), and are a formula that, without being a type of retirement recognized by Social Security, results from an agreement between the worker and his company with the objective that he stops working, but reaches the legal retirement age with good financial guarantees.
This solution has little to do with early retirement, with which it is sometimes confused, which consists of accessing the pension before the legal age and is a form recognized by the Administration. In many cases, companies offer this type of formula in situations of collective dismissals, but not only in these cases. In some sectors, agreements even oblige companies to provide their workers with these agreements on a voluntary basis.
But are these types of situations really beneficial for workers? What factors should we consider if we have the possibility of retiring early? And, perhaps most importantly, will we be better or worse than we are now? However, let's first define what early retirement is.
Pre-retirement is an agreement between the employer and the employee through which it is agreed to end the employment relationship, ensuring the worker an economic level similar to that which he or she enjoyed while employed, allowing him or her to reach the legal retirement age with certain financial guarantees. "Pre-retirement allows access to unemployment because a dismissal occurs and the company maintains contributions until age 61 if the dismissal is for economic reasons, or until age 63 if it is for another objective cause, as long as the worker is at least 55 years old. When, upon reaching the ordinary age of pre-retirement, the pension is requested, the person stops receiving unemployment or subsidy and company contributions and receives the retirement pension," explains Paula Ramón, a retirement lawyer at Campmany Abogados.
Although in reality there are no established legal requirements to be able to retire early, this possibility is generally offered to employees who meet certain criteria such as being over 55 years old, not yet being able to access early retirement, having paid sufficient time to the insurance system, Social Security and have extensive seniority in the company or sector.
The most common thing is that the worker ends up receiving between 60% and 80% of the salary he earned, although this payment can be articulated in different ways, depending on the agreement between the company and the worker. The company continues to pay Social Security contributions to the Administration until the worker's final retirement so that his pension is not affected.
Aurora Rodés, a speaker on the labor commission of the Official College of Administrative Managers of Catalonia (COGAC) and an administrative manager, gives more details about this payment in monthly payments or in the form of compensation. "If the agreed dismissal that leads to the so-called “pre-retirement” is objective, the worker is compensated with 20 days per year worked, and this compensation is exempt from taxation if it does not exceed the maximum limits. If it is greater than 200,000 euros, it will be taxed from this amount. This compensation is received in a single payment," says the specialist. Now, if the dismissal is unfair, "the worker receives 33 days per year worked (with a maximum amount limit), and can receive it divided into monthly installments, to complete the unemployment benefit. This must be agreed upon through conciliation of the "If unemployment is collected, in addition to compensation or part of the salary, it will be taxed for all concepts."
"There are two fundamental assumptions why companies launch this type of process," explains Juan Fernández Palacios, director of the Ageingnomics Research Center at Fundación MAPFRE. "The first usually occurs in a context of massive layoffs. Here it is the company itself that offers early retirement, for economic reasons or related to technological improvements, providing the employee with compensation for the dismissal, which is often in the form of payment. monthly, and that will help you reach retirement with economic conditions very similar to those you had.
But there is another assumption: that it is the employee who requests it. "In this case, the worker is close to retirement age and wants to retire from the labor market, but does not yet meet the requirements to request early retirement, so he asks his company for the possibility of doing so while maintaining a good part of your salary and the contributions for your future retirement pension to Social Security,” says the expert. “There are cases in which the company is interested in early retirement to better manage its human resources, thus giving way to younger generations and renewing its workforce little by little.”
In all cases, however, early retirements are voluntary, although Fernández Palacios recognizes that according to a 2007 study, when early retirements were more numerous in our country, one in three early retirees in Spain perceived early retirement as involuntary.
Anna, 59 years old, is a worker from Barcelona in the healthcare sector and is considering early retirement. She has been in her position for about 38 years, dealing with the administrative part of a women's care program. "I love my job," he explains, "and I also love working with my colleagues. If I had to say in one word why I'm considering early retirement, it's because of freedom. I want to get up whenever I want, go to bed whenever I want, and do a little homework." life my way, not always looking at the clock, with the cell phone in my hand, with the schedules in mind...".
But Anna also recognizes that losing contact with her colleagues will not be easy to deal with on an emotional level. "I'm sure I'll keep in touch with some, but many will be lost along the way," she reflects. "I will miss the small joys: our fantastic breakfasts and snacks together where we discuss personal things like a child getting married, a grandchild being born... Plus my job is very nice, because we work with surrogate mothers and we see them throughout their pregnancy. And When they are already born, many bring their babies to us. Retiring early will mean losing all that.
Anna's case is complicated in this sense, but it doesn't have to be that way. According to Carlos, who is also considering early retirement and works in a large banking entity in our country, in general, "early retirement is something desirable for the majority of workers, so the majority generally feel good about leaving." his work".
Another issue is economic. Retiring early means suffering a loss of purchasing power that can be significant, so it is usually advisable to make a prior calculation of whether what we are going to receive will be enough to avoid having to change our lifestyle too much. "The worker has to make the calculation to see if what he is going to charge covers your spending needs or not," says Carlos, who also collaborates with a union on these issues. "You can always decide not to sign up for early retirement if the money is not enough. I have colleagues who are still working at over 58 years old and who have had several opportunities to retire early."
Elisabet Ruiz Dotras is a doctor in finance, professor of Economics and Business Studies at the UOC, expert in financial education, and reviewer of the journals International Journal of Economics and Finance and International Journal of Knowledge Society Research. For her, before making the decision to retire early, some aspects of personal finances must be evaluated.
“The first thing is to know if there are savings. It is very different to have a very low salary and a lot of savings, or a high salary and little savings. At this stage of life, although an exact figure cannot be given because it depends on the monthly expenses that each person has, between 60,000 and 80,000 euros saved for the coming years could be a minimum or adequate figure,” he advises. To calculate how much savings is needed for retirement, it is essential to be clear about the fixed monthly expenses, which can vary greatly depending on whether the habitual residence is paid for, if we need expensive health treatments... “The income we receive by whatever means (the part of the salary agreed upon with the company, unemployment benefit, income from assets or rental properties, etc.), must cover monthly expenses and leave 20% to save. Of this percentage, 10% would be savings for the coming years, and the other 10% would be for unforeseen events that arise throughout the year and also for leisure,” he points out.
According to Ruiz Dotras, it is important to think under what conditions we want to access early retirement. "You must calculate that you will not have any more income, and that the cost of living increases year after year. At least you must make a calculation of a 2% increase in inflation. If you now spend 1,000 euros, with inflation next year you will spend 1,020, and the second 1,040.4 euros (the growth is exponential). Furthermore, you must anticipate that expenses will rise more than income ends up rising, because expenses come from purchases and supplies, and salaries and pensions are corrected. with the CPI, which is a more global basket, which is smaller and includes more items than the aspects in which our main expenses lie," he points out.
"Financially I'm sure I'll have to tighten my belt," Anna confesses. "I think I will have to pay more attention to the supermarket offers. What happens is that, since I will have much more time, I will be able to look at all the establishments and decide which one to buy what, looking for the best price."
In any case, according to Fernández Palacios, “early retirement does not have to harm the worker in terms of his future retirement, since contributions continue. Of course, if a pre-retired worker agrees to early retirement, he will lose the right to continue receiving the amount that he had agreed upon with the company if it had been established until he reached ordinary retirement age. Regarding whether it represents an economic loss in the face of definitive retirement, whether it could lead to a reduction in the future pension, everything will depend on the worker's contributions from the beginning of his pre-retirement,” he explains.
In addition to the economic factor, Ageingnomics recommends that each person calmly evaluate their particular case taking into account their needs and aspirations. "Not only do we have to take into account the financial part and the expenses necessary to maintain our lifestyle," says Fernández Palacios. "It is also important to consider the reason for this decision: if it is because you want to change your sector or activity, you can always choose to reinvent yourself or start a business. If it is a decision due to dissatisfaction in your company, I would recommend talking to your company to find a solution. In the end, senior talent is very valuable and companies that have generational diversity create more value.”
“It is also essential to make this decision taking into account the preferences and particular needs of each person,” the expert emphasizes, “and not from that widespread discourse that an inactive life of rest is necessarily better, especially at a certain age, because it is not It is entirely true. In the end, maintaining a stimulating profession throughout life protects physical and mental health.”
In any case, if the decision to retire early has already been made, the expert recommends also considering the opportunity that this step represents to reinvent yourself or even to continue growing professionally despite your age. "We always insist that age is not an impediment to remaining active," he says. "In fact, as we have seen in various studies, the senior economy has an increasingly important role in our society and is an engine of employment for all generations. Therefore, early retirees can choose to reinvent themselves at work, looking for another sector of work. , or opt for entrepreneurship".
Anna, for example, is clear about what she will do if she finally decides to take the step towards early retirement. "I really like to travel and go to cultural and social events, and we live in a city where there are many and free. When I retire early I will be able to go to many more and travel without a return ticket," she explains to us. "Anyway, I don't think you should set any goal to occupy your time once you've retired early. We've already had our time occupied all our lives! Now it's time to let our minds free. I've been participating in a support group for young girls with social problems and when I retire early I will be able to go more. The whole topic of social help interests me a lot," she acknowledges.
According to Fernandez Palacios, the number of early retirements is somewhat lower today than it was in the past. However, according to his opinion, technological advances and the emergence of artificial intelligence could bring about a reactivation of the massive processes of yesteryear. “Let us trust that we are capable of arbitrating the appropriate public policies so that this does not put our model of society at risk,” he acknowledges.
Uncertainty about the future is, in fact, one of the reasons why Anna seems to tend to decide on her upcoming early retirement. "The main reason, actually, is health. We have worked for many years and if you wait too long, maybe in the end you are not very well enough to enjoy the years you have left," she says. “If you retire at 60-something, assuming that you feel very well until you are 70-something, you have about ten years left to have a good time,” she concludes.
