Social Security is pushing those who can continue working to delay their retirement as much as possible, but it resists modifying one of the most discussed rules of the system: the penalty in the pension of those who they retire earlyeven when they accumulate more than 40 years listed.
The flexible retirement reform contemplated in the Royal Decree 416/2026 will come into force on August 28, launching the Government’s strategy to extend working life of workers and contain pension spending.
What changes with the reform. The new flexible retirement regulation seeks to encourage more people to extend your working life as much as possible voluntarily and can make part of their pension compatible with a salary, something that current regulations did not allow.
The idea is not to force anyone to continue working beyond the legal retirement age, but rather offer more incentives so that those who can and want to do so, keep working. The person who is already retired, instead of stopping working completely, can do so part-time. In exchange, they will receive a salary for their work and a supplement to the proportional part of the pension. In this way, someone retired can obtain a higher income while still active, and will receive 100% of their pension again when they stop working.
That is, if someone retired receive a pension of 1,000 euros, and for working 32 hours a week (80% of a full day) they will pay you a salary of 1,000 euros, your pension will be cut in that proportion, but the sum of salary (1,000 euros) and pension (200 euros) will provide you with greater monthly income. The current regulations force you to choose between working or receiving the pension.
Put obstacles to early retirement. The demographic pyramid in Spain, in which there are fewer and fewer young people to maintain the pension system and a longer life expectancy, has forced successive governments to take measures to maximize working life of employees to continue contributing. This has led to the extension of the retirement age, which has been progressively delayed since 2011 to go from 65 to 67 years in 2027.
The other measure approved in the pension reform of 2024 to discourage early retirement is to apply some reducing coefficients to the retirement pension, so that the more you anticipate retirement, the less pension you receive in return.
Contribute 40 years without reward. One of the problems posed by the application of reducing coefficients is that those workers who already exceed the maximum limit of years of contributions necessary to access ordinary retirement at age 65 (38 years and six months or more by 2027), will not be able to retire early. without penalizing themand end up getting paid a lower pension than other workers with fewer years of contributions.
This group has already organized under the association Asjubi40 and different political groups with representation in Congress have carried out proposals to eliminate this grievance to workers with long contribution periods when they want to advance their retirements.
As and how he published The Independentvoluntary early retirees bear an average reduction coefficient of 11.36% and receive an average pension of 2,002.58 euros per month, after retiring at an average age of 63 years and two months. In the case of involuntary early retirement, the average reduction rises to 18.9%, the average pension stands at 2,100.42 euros per month and the average retirement age drops to 61 years and ten months.
The unaffordable cost of stopping working. The reason given by the Government for not eliminating these reducing coefficients It’s simple: removing those penalties would be expensive. The Executive estimates an additional cost of 3,358 million euros per year for Social Security if the reducing coefficients are eliminated for those who retire early after having contributed 40 years or more.
Of that figure, 1,345 million would correspond to voluntary early retirement, and 2,013 million would correspond to those retired involuntarily, that is, those who have been affected by ERE, business closures, force majeure or other cases considered by the General Law of Social Security.
Social Security cannot assume it. Although Spain is registering record numbers in terms of number of members. It closed 2025 with a budget deficit of 5.58 billion euros. Once again, we are facing a record to be treated of the smallest deficit of the last 14 years, as as highlighted The Confidential. But it is a deficit, after all.
However, the incorporation of contributions such as the Intergenerational Equity Mechanism (MEI), has contributedIn 2026 alone, 1,162.23 million euros will be added to the Social Security Reserve Fund, which reached a total amount of 15,267 million euros last March.
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