How the retirement pension is calculated

The retirement pension that Spaniards will receive in the future is one of the topics that are the order of the day, both in the circle of government and among workers. There are many unknowns about the amount of benefit that current workers can enjoy when they retire, on the one hand because of the economic crisis and on the other hand because of the aging of the population. Meanwhile, we can know the present amount to which we are entitled, so in this article of .com we will explain how the retirement pension is calculated.

Photo source: cosaslegales.com

one

First, to clarify the concepts, we will distinguish between the two types of pensions that can be accessed through Social Security:

• Contributory pension : It is that pension of general regime, which is held by the right to have been making contributions to Social Security throughout the years of work. To have it, you must have contributed at least 15 years, of which 2 of them must be in the last 15 years at the time the pension is requested.
• Non-contributory pension : These are pensions of a more exceptional nature, when the 15 years of contribution or disability is not reached.

In this article we will focus on contributory pensions.

two

We will need to know mainly two data that will allow us to calculate the retirement pension later. The first is the regulatory budget, which is calculated according to the contribution made by the citizen throughout his working life. Currently it is calculated based on the last 16 years, with the modification introduced with the new law, the time will gradually increase until taking into account the last 25 years in 2022. These are updated according to the CPI of previous years.

3

The second is the percentage applicable to the regulatory base, that is, the percentage that we will receive based on what was previously quoted is calculated. The percentages vary as follows:

• If we have quoted up to 15 years, it will be 50% of the regulatory base.
• Starting at age 16, one increases by 0.19% per month for each month added between 1 and 248.
• Monthly increase of 0.18% from month 248.
• The maximum computable is 100%, which can not be exceeded.

4

There are other circumstances that vary the amount of the pension, such as the existence of disabilities or having spouses who are in our charge, for example.

5

Given that these calculations are complex, that the law is still in the process of adaptation until the ordinary retirement age is established at 67 years, and that the existence of circumstances that may vary the amount, we propose the use of the service of Self-calculation of the pension provided by the Social Security. With it, just by introducing our personal conditions, we can know exactly the pension to which we are entitled.