Royal Decree Law 11/2024, recently approved by the Congress of Deputies, establishes the new requirements, conditions and advantages that will benefit those workers who voluntarily delay their definitive exit from the labour market and opt for delayed retirement.
These measures represent an adaptation to the demographic, labour and economic reality of the country, encouraging a gradual exit from the labour market and taking advantage of the talent and work experience acquired by older workers.
But is it really worthwhile for the worker to delay retirement? Do the economic improvements in benefits from a delayed retirement compensate for the effort of continuing to work for a few more years? Find out the answers to these and other questions from our experts in retirement plans de Euroteide InsuranceKeep reading and we'll tell you all about it.
What is delayed retirement?
This is an option that allows workers who reach the minimum retirement age to remain in the labour market beyond the minimum age established by regulations.
In exchange, they acquire the right to enjoy an increase in the amount of your retirement pensionIn certain cases, they also receive additional tax incentives and benefits.
Furthermore, it is a flexible alternative. For example, the worker can decide to combine work and pension, working part-time to have more hours of leisure and rest.
How delayed retirement works
The first thing to do is to find out what the real impact of the delay in retirement will be on the amount of the pension. A prior and exact calculation of the different assumptions can be requested at any Social Security office.
When the time comes for ordinary retirement, the interested party must formally notify Social Security that he will continue working. This communication can be sent:
- In person, at any Security office or delegation.
- By , through the electronic headquarters of Social Security.
- From the employment services of the different autonomous communities.
And when the worker finally decides that the time has come to retire, nothing changes either: The procedure is the same as for non-delayed retirements.That is, the retirement application is submitted and the documentation required by Social Security is provided.
Once retired, the interested person receives an economic supplement for each full year of contributions after reaching the ordinary retirement age. This economic supplement can be received:
- In the form of an amount added to the amount of the ordinary monthly pension.
- In a single payment, the total amount of which is calculated as established in the regulations.
Advantages and disadvantages of delaying retirement
In addition to the increase in retirement pension and additional incentives (if the person concerned is entitled to them), delayed retirement can help to avoid the demotivation, depression and social isolation that sometimes result from ceasing work activity.
Keep in mind that This is an advantage that is not universal.: A high percentage of people who retire adapt easily to the new situation and fully enjoy their retirement period.
On the other hand, with each passing year, the probability of middle-aged people increasing:
- Contract a serious or disabling illness.
- His death occurs.
In the first case, the affected person will not enjoy his or her retirement in full physical and/or mental capacity.
In the second case, he will not even retire. This means that he will not receive a single cent in pension.
How to decide if delayed retirement is right for you
Now, theory is one thing and practice is quite another. At some point, the worker who is entitled to retire or who is still active and could be retired will ask himself questions such as the following:
- If I continue working and something serious happens to me, I won't take advantage of my retirement.
- I turned 69 years old a few months ago: am I interested in delayed retirement when I am over 70?
- A year ago I decided not to retire and now it is becoming increasingly difficult for me to continue working. Should I continue or should I quit?
Therefore, the voluntary delay of retirement is a decision that It must be taken in a 100% informed manner and must be reconsidered every year.. To do this, take into account the following circumstances:
Are you in good health and are you physically fit enough to fully meet the obligations imposed by your job?
On the other hand, do you have personal projects to develop or hobbies to whom you would like to dedicate more time?
If the answer to the first question is negative or doubtful and the answer to the second question is affirmative, your best option is to give up delayed retirement.
And regardless of your health and fitness level, the same goes for projects or hobbies that you've never devoted enough time to. At certain ages, time is much more valuable than money.
Economic reasons
If you think your pension will be too small and you want to improve your benefits, that is an argument that you should also weigh up.
Work motivations
Do you like your job or not? If not, keep in mind that job dissatisfaction increases with age. And even more so when you get older and work knowing that you could be resting.
Do you have financial doubts and don't know what to do?
In this case, consult with one of our experts who will explain in detail how delaying retirement will affect your future financial situation.
We conclude by adding that, whether or not you are thinking about a delayed retirement, you can supplement the public retirement benefits to which you are entitled. with a Pension plan or income insurance. Contact us and we will find the most suitable option for you.
