This way, you can calculate how much you will receive when you retire

Find out about what you should take into account for seeing the pension you are entitled to.

Retirement benefit covers the loss of income suffered by a person when, after reaching the established age, they cease to work as an employee or self-employed and finish their working life. In Spain, the protection system has two levels

  • Contributory: for people who have contributed to the system for a minimum period of time. 
  • Non-contributory: for people who have not paid contributions or have done so for an insufficient length of time for accessing contributory benefits.

To receive a contributory pension, you must have paid contributions for at least 15 years, and also have paid contributions for at least 2 years within the 15-year period prior to the entitlement.

To calculate how much you will receive for retirement, you first need to know the regulatory base. This article will explain how you can calculate your regulatory base to see much you will receive for your pension.

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What do you need to know to calculate your pension?

At the contributory level, the benefits received are directly proportional to the contributions paid into the system. This is known as the contribution proportionality principle.

Before you start calculating your future pension, you need to be aware that the pension system in Spain is undergoing gradual changes on the basis of Act 27/2011, which started to be implemented in 2013. These changes, which are going to be applied gradually until 2027, represent a progressive increase in retirement age and in the number of years of contributions taken into account when calculating the pension or obtaining 100% of the regulatory base. Taking these changes into account, there are several considerations that need to be taken into account when it comes to calculating your pension: the number of years of contributions, retirement age, regulatory base and the contribution period used to calculate the regulatory base.

  • The minimum contribution period required by law to claim a pension is 15 years of contributions. But this minimum period only guarantees a pension of 50% of the regulatory base. To be able to receive 100%, you need to have paid contributions for more years than, currently, 35 years and 6 months, increasing to 37 years in 2027.
  • As respects retirement age, in 2019 the standard age is 65 years and 8 months, except for people who have paid contributions for at least 36 years and 9 months, who may retire at 65. Since 2017, the age has been 67 years, but people who have paid contributions for at least 38 years and 6 months will be able to retire at 65.
  • The regulatory base is an amount calculated by adding up the contribution bases included in each worker's paycheck, which are approximately equivalent to their gross salary during the years prior to retirement. This is an important figure as it lets you see how much you will receive for your pension once the percentage of the corresponding regulatory base has been established, depending on the length of time you have contributed, as explained above.

To calculate the regulatory base, the contribution bases for a certain period of time prior to retirement are taken into account. This period, which was 15 years before the Pension Reform Act, is 22 years in 2019 and will progressively increase until being set at 25 years in 2022.

The final pension will be a percentage of this regulatory base. With 15 years of contributions, 15% of this base is received. To receive 100% in 2019, you need to have paid contributions for at least 35 years and 6 months. In 2027 and subsequent years, you will need to have paid contributions for at least 37 years.

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What happens if the resulting pension is more or less than what is established by law?

If a worker has paid contributions on part-time work or work with a low salary and, when calculating their pension, it is below the minimum established by law, the State will supplement their pension up to the legal minimum, paying out what is called a pension benefit. To be able to receive these supplementary benefits, a given lack of income must be demonstrated and you must reside in Spain.

The opposite may also occur, if a worker has paid contributions on a high salary and the resulting pension exceeds the maximum pension established by law. In these cases, the excess contribution is lost as it is not possible to receive a pension above the maximum.

Once you know how to calculate your pension, you can evaluate whether it is sufficient or not for maintaining your standard of living after retirement. If you want to guarantee peace of mind for your future and obtain an income to supplement your pension, we suggest you take a look at our pension plans; you will find a wide range of BBVA savings products for all ages and investment profiles. Visit bbva.es and discover the best pension plan for you.

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