How many years you have to pay contributions to be able to retire

Find out how many years you need to pay contributions to retire and how the contribution period affects the amount of your pension.
The pension reform of 2011, articulated in Act 27/2011, introduced parametric changes to the requirements for retiring, which are being implemented gradually between 2013 and 2027. This is why it can be difficult to see how many years of contributions you need to retire or what the official retirement age is. This article will help you answer your questions and find out how the number of years you have paid contributions affects the amount of your pension and what options you have if you want to continue working after reaching retirement age.
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How the number of years of contributions affects the pension received

When calculating retirement age and the corresponding pension, there are two key variables: the amount of social security contributions paid during the last few years and the number of years of contributions. The Social Security department establishes the amount of the pension according to these two variables. To see how the contribution period affects the pension and what the periods established under legislation are at present, we can establish these three categories:

  • Less than 15 years of contributions: to be eligible to receive a contributory pension, you must have paid contributions for a minimum of 15 years, and also have paid contributions for at least 2 years within the 15-year period preceding the entitlement. This leaves workers who do not meet these conditions outside the pension system. However, in some cases, the system makes provisions for these people to receive an additional pension supplement.
  • Between 15 years and 36 years and 9 months (the requirements for 2019): people with a contribution period within this range and who are 65 years and 8 months old may retire at this age. In 2027, this period will be extended to 38 years and 6 months, and the normal age to 67 years.
  • Over 36 years and 9 months (according to the requirements for 2019): people who have paid contributions during this time may retire at the normal age of 65. From 2027, at least 38 years and 6 months of contributions must be demonstrated to be able to retire at this age.

After analyzing the typical retirement age, which depends on how many years you have paid contributions, it is important to know how to access 100% of your pension. For this, in 2019, you must have paid contributions for a minimum of 35 years and 6 months. However, this period is also being gradually increased. In 2027 and subsequent years, you will need to have paid contributions for at least 37 years.

Active aging policy: a way of increasing the number of years of contributions

Given the high unemployment rates in the country over the last decade, it is reasonable to conclude that not everyone will be able to demonstrate such a long contribution period, both for retiring at 65 and for receiving 100% of the pension. Older workers can also give their work extra value with the experience they have built up over their working lives. To use this experience and offer workers an opportunity to increase the amount of their pension while they are still working, the law provides for three situations in which it is possible to retire after normal retirement age:

  • Delayed retirement allows workers to continue working and paying contributions after they have reached retirement age, while increasing the amount of the pension they will receive when they do retire. The pension bonus ranges from 2% to 4% for each full year of contributions paid beyond normal retirement age.
  • Flexible retirement allows a pension to be combined with a part-time employment contract, although in this case the workday limits established in article 12.6 of Spain's Workers' Rights Statute must be respected, with the benefits being received reduced by the same proportion as the reduction made to the employee's workday compared to the hours of a comparable full-time employee.
  • On the other hand, active retirement is a measure aimed at workers who have reached legal retirement age and who have paid contributions for the minimum number of years required to receive 100% of the regulatory base. If these workers would like to, they will be able to continue working, whether employed or self-employed, receiving their salary and 50% of their pension at the same time. In the case of self-employed workers that employ at least one worker, 100% of the pension is received.
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In conclusion, the number of years of contributions required to retire will vary in the future, with penalties for those who have paid contributions for less than 37 years and bonuses for those who want to continue working after reaching official retirement age. Given this situation, more and more workers are choosing to take out a pension plan to supplement the amount of their pension so as not to lose purchasing power when they retire.

If you are worried about your retirement and want to know what your savings options are, visit any BBVA branch or go to bbva.es to find out about our pension plans and other investment options for your savings.

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