What is early retirement
Early retirement allows you to stop working and draw your pension before reaching the standard retirement age. It is an attractive option for many people, but it has a clear downside: the pension is reduced through the so-called reduction coefficients. That is why, before taking the step, it is worth doing the sums calmly.
There is no single form of early retirement, but rather several types with different requirements and consequences. Choosing well can make a significant difference to the amount you will receive for the rest of your life.
Voluntary versus involuntary
The most relevant distinction is between the voluntary type and the involuntary or for a cause not attributable to the worker type.
In the voluntary type, it is you who decides to bring your retirement forward. In exchange for that freedom, the law requires a minimum age closer to the standard one and a higher contribution period, and applies stricter reduction coefficients.
In the involuntary type, leaving work does not depend on your will: it stems, for example, from a dismissal or a termination of the contract on objective grounds. In these cases it is usually possible to bring the age forward a little more and the reduction coefficients tend to be somewhat more favourable, because the law recognises that it was not your choice.
There are also special cases, such as early retirement for arduous, toxic or dangerous work or for certain degrees of disability, with their own rules.
How the reduction coefficients work
The reduction coefficients are the element that weighs most in the decision. They work as a percentage that is deducted from the pension for each period brought forward: the more months you bring forward retirement relative to the standard age, the greater the reduction. And that reduction, as a general rule, is maintained permanently throughout the entire life of the pension.
The calculation is influenced both by the months brought forward and by the years contributed and the type chosen. The best way to decide is to run a simulation of your specific case and compare it with the pension you would receive by waiting until the standard age.
We help you decide and claim
At BBM Abogados we review your employment history, calculate the real impact of the coefficients and tell you clearly whether it is worthwhile to bring your retirement forward. And if the INSS refuses your application or applies an incorrect calculation, we submit the prior claim and, if necessary, the lawsuit before the employment court.
You can find out more in our general guide to pensions and retirement. Whenever you want an analysis of your case, contact us or call us on 942 36 10 48; we advise clients in Santander and throughout Cantabria.
