Keys for calculating how much your pension will be

Find out how much your pension could be and the conditions required under current legislation.

The situation of pensions and pensioners' purchasing power are always current issues, especially in recent years in which the system has been in deficit, and with a view to the significant demographic challenges that will have to be addressed in the decades to come, such as the retirement of the baby boom generation, the largest in our country's history.

Although agreements such as the Toledo Pact are consensus mechanisms to ensure the stability of the system, parametric reforms to the pension system have been introduced in recent years that affect retirement age and the way in which the benefit is calculated. Although it cannot be ruled out that future reforms in years to come will once again modify the conditions for pensions, this article shows how to calculate how much your pension will be in accordance with current legislation.

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Key concepts: contribution base and regulatory base

Current legislation takes into account two key aspects when it comes to calculating the amount to be received for retirement: the contribution base and the regulatory base. These are two fundamental elements in the formula used by Social Security to calculate the amount that pensioners will receive.

  • Contribution base. The contribution base is the base used to calculate retirement benefits based on the social security contributions paid by workers and companies throughout their working lives. This base is calculated in accordance with the worker's total remuneration, which includes overtime and extra pay. The calculation is done by adding up the worker's total annual income, regardless of per diems and travel or transport expenses, and dividing the resulting amount by twelve monthly payments, that is, by prorating any extra pay, if any. On the other hand, self-employed workers can choose the base on which they want to pay contributions, although from the age of 47 there are restrictions when it comes to increasing the base.
  • Regulatory base. The regulatory base takes into account workers' contribution bases during the years prior to their retirement (contribution period). To calculate the regulatory base, all the contribution bases in the years prior to retirement are added up and divided between the total number of years eligible for inclusion, multiplied by 14 (since pensioners receive 14 payments a year, but only pay contributions for 12 annual bases, hence this adjustment).
That said, the number of years taken into account for calculating this base has changed as a result of the latest reform of pension regulations introduced by Act 27/2011 of August 1, on updating, adapting and modernizing the Social Security system. Until the introduction of this law, the regulatory base was calculated according to the last 15 years worked. However, the new law introduces a progressive increase in the number of years eligible for inclusion, which will reach 25 in 2022. In 2019, the regulatory base was calculated based on the contributions paid in the last 22 years. It is important to take into account that for calculating the regulatory base, the contribution bases are updated according to the CPI, except for the 24 prior to the date of retirement, which stay at their nominal value.

Retirement age, years worked and reduction coefficient

The new regulations also set a progressive increase in retirement age from 65, in force until 2013, up to 67 in 2027. However, anyone that can demonstrate a long history of contributions, established at at least 38 years and 6 months of contributions in 2027, will still be able to retire without any penalties at 65 years of age.
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Similarly, they establish a minimum number of years of contributions to be able to receive a pension at 100% of the regulatory base; this period will be 37 years from 2027. People who have only paid contributions for the minimum period required to receive the contributory pension, set at 15 years, will be eligible to 50% of their regulatory base. Additional months of contribution will increase this percentage, until reaching 100% with 37 years of contributions in 2027 and subsequent years. In 2019, the requirement for receiving 100% of the regulatory base is less strict, as it can be achieved with at least 35 years and 6 months of contributions.

In short, you need to follow these steps to calculate your pension:

  • Compiling contribution bases and updating them according to the CPI.
  • Calculating the regulatory base from these contribution bases.
  • Applying the percentage corresponding to the total period of social security contributions to this regulatory base.

A good option for supplementing your state pension is to take out a private pension plan which, in addition to providing an additional income after retirement, can be used to deduct your contributions to it from your personal income tax base. At BBVA, we offer pension plans for all ages and investment profiles. Visit one of our branches or go to to find out about all the advantages of our pension plans and guarantee your purchasing power when you retire.

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