Retirement pension: how the calculation is made

How many years do I need to calculate the regulatory basis of the retirement pension?

How many years do I need to calculate the regulatory basis of the retirement pension?

The first premise for calculating our public retirement pension is to add all our contribution bases for the years prior to our retirement . If we add all these bases we will obtain our regulatory base , to which we will have to apply percentages, which vary according to our age, the time that we advance or extend the ordinary retirement age and, of course, our years of contribution.

It should be noted that currently the ordinary age to qualify for retirement pension is 65 years and 6 months, except if we have quoted 36 years or more, which will allow us to retire at 65. The retirement age will be increased at the rate of one month per year until 2020 and, thereafter, two months per year until 2027, in which 67 years will have been reached as the legal retirement age. They will be able to continue retiring then with 65 years those that credit at least 38 years and 6 months of contributions.

The current system not only raises the legal retirement age. It also increases the amount of time needed to receive 100% of the benefit from 35 to 37 years in the year 2027. Currently, at least 35 years and 6 months of contributions are required.

If a worker intends to retire in 2016, the regulatory base will be calculated based on the last 19 years of contributions. This, multiplied by 12 months of the year, results in 228. Each year this scale is increased in 12 months. To continue with the calculation, you have to divide the regulatory base by the divisor, which is the result of multiplying the number of years quoted by the total number of payments (14). In this case, they are now 19 years old by 14, resulting in 266. Each year it increases by 14.

Thus, for the year 2022 the regulatory base will be the result of dividing by 350 the contribution bases of the worker during the 300 months prior to the month of retirement.

Year Computable months Divider Compliant years
2018 252 294 twenty-one
2019 264 308 22
2020 276 322 2. 3
2021 288 336 24
2022 300 350 25

Minimum requirements for the retirement pension

– The worker must have at least 15 years of contributions. Two of them must be included in the last 15 calendar years before the date of application for retirement.

– Having reached the corresponding ordinary age to apply for the retirement pension.

– In 2018 we can apply for retirement at age 65 if we have contributed 36 years or more. If they have contributed less than 36 years, the retirement age is 65 years and 4 months.

 

What happens if I am autonomous?

Although it is a collective full of legislative and tax singularities, self-employed workers have the right to retire early in the same way as employed workers in the form of voluntary early retirement.

The standard establishes the same requirements in the case of voluntary termination. They can retire in advance at 63 provided they have quoted, at least 35 years. As in the general scheme, the retirement age will be raised to reach 67 years in 2027, so the early retirement age will be two years less, 65 years. The self-employed can not avail themselves of the non-voluntary early retirement formula.

How is it calculated?

The calculation of the first retirement pension that we will charge can be divided into the following steps:

– The first step will be to compile the social security contribution bases of the last years prior to retirement. As we have already explained, in this 2016, the calculation takes into account the 19 years prior to retirement-

– Once we have the contribution bases we will proceed to add them and divide them by 266 . So we will get what is known as the regulatory base. We should not confuse it with the retirement pension. For this we must make a series of adjustments on the regulatory basis.

– The regulatory base must be adjusted according to the number of years quoted throughout our working life . 15 quoted years give right to 50% of the regulatory base. And to access 100% it is necessary to have 36 years.

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The regulatory base for those workers who access retirement before reaching the ordinary age will suffer a reduction depending on the time that the retirement age is anticipated .

On the other hand, if a worker fulfilling the requirements to retire delays his retirement beyond the ordinary retirement age, his regulatory base will be increased depending on the number of full years that delays retirement.

Let’s put a concrete case

Let’s suppose that we are a worker of 65 years and 4 months of age who is credited with being 33 years of age in the General Social Security Scheme. The total of its contribution bases total € 345,000. It must be remembered that the contribution bases are updated via IPC, except for the 24 closest to the causal event, which are taken at their nominal value. The regulatory base will therefore be the quotient between € 345,000 and € 266, that is, € 1,296.99.

As he retires at ordinary age and has paid a minimum of 15 years and at least two of those years are within 15 years before the right is generated, he is entitled to receive a pension.

We have already calculated our regulatory base. Now we have to apply a percentage based on the years of contributions. We can divide it in the following steps:
The worker has 33 years of contribution, that is, 396 months, which means that he will receive a part of the pension based on those years but not 100% since it is necessary to credit 426 months or more of contributions.