When the ordinary retirement age is reached, many workers decide to abandon their active life to enjoy this new stage of their life away from work. However, there is also the possibility of delaying the collection of the retirement pension, in what is known as delayed retirement.
This consists of the possibility of voluntarily delaying the retirement age above the established legal age, which allows you to enjoy a series of benefits. When a worker opts for it, he can accumulate a greater number of years of contributions, which means he can increase his future pension. This modality is incompatible with partial, early, flexible or active retirement.
In this way, if a worker decides to delay his retirement, he will be able to continue working in the same company, in another job or even as a self-employed person, a period during which he will continue to contribute to Social Security and accumulate additional pension rights.
The benefits of delaying retirement
Since January 1, 2022, delayed retirement offers several benefits for those who decide to delay their retirement beyond the established legal age, including an increase in pension. In this sense, three types of incentives are established: additional monthly income of 4% for each year of delay in retirement, which is received throughout life; single payment at the time of retirement, which will depend on the years of contributions and retirement age (between 5,000 and 12,000 euros), or a combination of the previous two.
However, it must be taken into account that the compensation received in this pension is not linear, which means that the amount of the pension is not proportional to the number of additional years of contributions, but is calculated based on a formula . complex that assesses different factors (contribution bases, years of contributions and established limits).
In this way, from an economic point of view it is clear that it is profitable to delay the pension, also taking into account that delayed retirement allows workers to enjoy greater work flexibility. These can choose to continue working in the same company where they already worked, but also look for a new job and even opt for entrepreneurship and become self-employed (self-employed). In this way, the possibility of continuing in the labor market is given based on each person’s skills and preferences.
Not only do the workers benefit, but their companies do as well. Those that agree to keep their employees above retirement age are exempt from paying their social contributions for common contingencies, unless the worker has a temporary disability. To be eligible for delayed retirement, you must have contributed for a minimum of 15 years.
