Do retirees receive extra pay?

We will answer your questions about extra pay in retirement.
When thinking about retirement, it is normal to worry about the inevitable decrease in income and the potential difficulties in maintaining the standard of living enjoyed during your working life. Thus, sometimes people wonder if their retirement pension takes into account the extra payments. In this article you'll find all the answers to your questions about extra payments to retirees.
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How is a retirement pension calculated?

Before discussing how you receive your pension, the first thing you need to know is the amount of the pension. The amount received monthly depends on the number of years making contributions to the Social Security Institute and the value of said contributions in the years leading up to retirement. Starting in 2022, the calculation will be made using the bases of the last 25 years; in 2019, the calculation uses the last 22 years.

Since the latest pension reform has brought with it changes to be implemented gradually until 2027, when calculating the amount of the retirement pension, you must also take into account the year you retire. 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. By 2027, the standard age of retirement will be 67; anyone who has made Social Security contributions for at least 38 years and 6 months, will be eligible to retire at 65.

Furthermore, it is important to take into account the period necessary to reach 100% of the regulatory base (i.e. the full pension). In 2019, it is 35 years and 6 months. Starting in 2027, at least 37 years of contributions will be required. In light of all these changes, the simplest way to calculate your retirement pension is to use online simulators that take into account all the changes over the coming years.

Finally, when calculating the retirement amount, it is essential to remember that the Social Security Institute establishes maximum and minimum amounts that are independent of the number of years paying contributions, or the value of said contributions, to the Social Security Institute. These minimum and maximum amounts are fixed annually by law. In 2019, the minimum pension amount (retirement pension for people over 65 years of age with a non-dependent spouse) is 642.90 euros, and the maximum amount is 2,659.41 euros per month.

Extra payments during retirement

Most Social Security retirement pensions are received as monthly payments, with the annual amount divided into fourteen payments, one for each month of the year plus two extra payments in June and November. The requirements for receiving extra payments are the same as those required for receiving a retirement pension. The amount is the same as the ordinary payments received throughout the year.

The exceptions that do not receive extra payments are permanent disability pensions due to a work-related accident or illness. In this case, the pension is received in twelve ordinary monthly payments with the extra payments distributed among them. This way, the monthly payment received by these pensioners is slightly higher, but, in return, they do not receive that extra payment for summer and Christmas.

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Loss of purchasing power and pension plans

Extra payments can undoubtedly be a great financial aid for retired people, as they allow them to enjoy a worry-free Christmas or summer vacation and are also a supplement to their monthly income. On average, the value of the pension that a retiree receives in Spain is around 75% of his or her last salary. This large reduction in purchasing power can prevent retirees from enjoying their plans for retirement if they have no other sources of savings, such as pension plans.

A pension plan is a long-term savings product that aims to accumulate capital for use during retirement. Savings are achieved through one-off or regular contributions that are invested by the pension plan management company, in accordance with the investment policies established in the contract. Future pensioners choose the plan or plans most appropriate for them, depending on their profitability objectives and their individual risk profile. Upon retirement (or earlier in specific cases established by law) the investor recovers the capital saved plus any returns.

Saving for your retirement is essential. For this reason, at BBVA, we offer a wide range of pension plans that adapt to all ages and investment profiles. Visit to find the plan that best suits your needs and start saving for your retirement.

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