Although it is a stage of life that most of us look forward to, not everyone accepts the arrival of retirement. in the same way. There are people who, for the love of their profession or to continue running their company, decide to work beyond the age of 65. Others, however, do so under the obligation of a too fair retirement pension to face a cost of living that has not stopped rising.
For the latter, we have good news. From now on, working beyond the ordinary retirement age will have a reward. The Government has decided to pay more to those who decide to return to work after retiring, and it will do so with a formula that until now was hardly used: the flexible retirement.
The day opens wide. Until now, those who wanted to combine pension and self-employment could only do so between 25% and 75% of a full day. A very narrow margin for that would be profitable continue working beyond 65 years (or the 67 if the necessary contributions have not been made). Also, nothing self-employed in this formula. The new Royal Decree 416/2026which comes into force on August 28, changes that range by allowing retirees to work a day of between 33% to 80% of a full day.
The other novelty, perhaps the most striking, is that the self-employed are entering this modality for the first time. They will be able to make their pension compatible with self-employed activity, as long as they have not been registered as self-employed in the three years prior to retiring. With more than 3.47 million of RETA members in May, the group is not exactly small.
A reward for waiting six months. However, the entry into force of the Royal Decree comes with a detail that really does encourage those who have already retired to return to work. If you retire, wait at least six months without working, and then return to work, your retirement pension will increase significantly.
If a retiree returns to work under these conditions to work between 55% and 80% of the full day, he or she will receive a 25% increase in the pension he or she received just before starting to work. With a working day of between 33% and 55% of the full day, the increase rises to 15%.
“Our goal is for workers to have more and better options when it comes to retiring or combining employment and pension and now we propose an improved flexible retirement modality,” Minister Elma Saiz explained in a statement. Previously, the pension only decreased in proportion to the hours worked. Now there is a plus for coming back.
Spain needs people to continue working. Behind this reform there is a serious demographic and financing problem: there are fewer and fewer young people contributing and more retirees earning for more years. According to the INElife expectancy at birth in Spain is already around 84 years, with women exceeding 86 and men close to 81. That is, there are more and more people with the right to collect a retirement pension, and they collect it for a longer period of time.
Social Security, meanwhile, remains in the red. The system closed 2025 with a deficit of 5.58 billionalthough the data improves year after year thanks to employment. Let people extend their work life helps alleviate these bills, and that is why the Executive pushes in that direction from several frontsnot only with flexible retirement.
Those who retire early are not so lucky. It’s not all good news. Who decides to retire before the legal age still suffers penaltyand especially those who have accumulated more than 40 years of contributions. Even if they have far exceeded the required period, a reducing coefficient cuts their pension just like any other early retiree.
The collective, grouped in the association Asjubi40has been asking for this cut to be eliminated for some time. The Government has refused, and the reason is purely economic: removing that penalty would cost 3,358 million per year to Social Security.
Image | Unsplash (Alen Gevorgyan)
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