Social Security plans to cut the pension for early retirement by up to 14%

Up to 14% less pension for workers who have contributed more than 38 years if they retire early. This is the reality posed by Social Security for thousands of people who want to advance their retirement.

The system allows retirement up to two years early, but with reductions that can reach up to 19%, depending on the years contributed and the months advanced. The ministry does not consider eliminating these coefficients, despite calls from pensioner groups.

The reduction coefficients and early retirement

How the cuts work for advancing retirement

For years, Social Security has established that those who decide to retire before the legal age face a penalty on the amount of their pension. This reduction depends on how much the retirement is advanced and the years contributed.

For example, a worker with more than 38 years and 6 months contributed who chooses to retire 1 year and 10 months earlier than the legal age will face a 14% cut on their pension. If they only advance one year, the cut will be 5.25%, and if they advance two years, the reduction rises to 19%.

Who can retire and when based on years contributed

Currently, workers with 38 years and 3 months contributed can retire at 65 years old. Those with fewer years contributed will have to wait until 66 years and 10 months. Starting in 2027, the minimum age will rise to 67 years for everyone.

The possibility to advance or delay retirement is voluntary, but it comes at a cost: less pension if advanced, more incentives if delayed. This system seeks to balance the sustainability of public finances.

Criticism and the request to remove penalties

Retiree associations and the cost to the State

Various associations demand that reduction coefficients for early retirements be removed, especially for those with long working careers, as they consider these are not taken into account in the current calculation.

The Government has warned that eliminating these penalties would cost more than 3.3 billion euros to public coffers, an amount that currently seems impossible to assume.

Voluntary and involuntary early retirement

Penalties affect both voluntary and involuntary early retirement, such as when a worker is forced to leave their job due to a collective layoff or another reason beyond their control.

For now, there are no plans to eliminate these cuts, despite social pressure and demands from affected groups.

How it affects workers and what you need to know

Calculating the pension with penalties

Reduction coefficients apply to the amount that would correspond without advancing retirement. The more months advanced, the greater the cut, even if the work career has been long.

For example, a worker with a career longer than 38 years may see their pension reduced by up to 19% if they advance retirement by two years. This penalty does not distinguish between long and shorter careers.

What options do workers have

• Retire at the legal age according to years contributed (without penalty).
• Advance retirement, accepting a proportional cut.
• Delay retirement, receiving economic incentives but working more years.

The decision will directly impact quality of life during retirement, and this is precisely where the balancing act between a system seeking sustainability and the real needs of people is played out.

The reality is that retiring earlier can be costly, even if you have paid more than your neighbor all your life.