Types of retirement


The types of retirement are, depending on the reason why it occurs, the different ways in which a person who was working, stops working and ends his working life.

The types of retirement, as we discussed, are nothing more than the ways in which a person can end their working life. Depending on the reason and the duration of the working life, we can classify the types of retirement as follows:

  • Ordinary retirement.
  • Early retirement.
  • Partial retirement.
  • Flexible retirement.
  • Delayed retirement.
  • Active retirement.
  • Early retirement.

Depending on the retirement we choose, the amount of the benefit received may vary.

Types of retirement

Among the types of retirement we can find the following:

Ordinary retirement

It is that retirement that occurs when the worker in question reaches retirement age. In Spain, this age is set at 67 years since the labor reform, which, speaking of an ordinary retirement in Spain, this would be the one that occurs when you turn 67.

Through this retirement, to collect the benefit, it is necessary to have contributed to Social Security for a minimum of 15 years. In this way, the amount is calculated based on the last 20 years worked.

Early retirement

Early retirement is one that occurs when the worker chooses to retire before reaching the legal retirement age. That is, one who retires, in the case of Spain, before the age of 67.

He suffers a reduction of the pension, proportional to the years that the retirement is advanced. In this sense, a cut of between 6% and 7% for each year that has not been listed.

Within early retirement we can highlight two types:

  • Forced: The company decides to fire the employee, finding himself close to retirement. As long as, said employee is already in a legal situation to receive the benefit.
  • Voluntary: It is the employee who agrees to take early retirement. Once it meets the legal requirements to receive the benefit.
  • Mutual status: Provided that the status of mutual member in any Employed Workers' Mutual Fund is held before January 1, 1967, the worker may obtain early retirement. To do this, they can retire at age 60, after meeting the requirements for Social Security contributions.
  • By professional activity: Provided that the conditions are met, those employees who, such as miners, carry out activities associated with occupational risks that can cause illness to the individual, can request early retirement.
  • Workers with disabilities: Those workers who have a disability equal to or less than 65% can request early retirement. On occasions, this degree of disability may be lower (45%), but the required conditions must be met.

Partial retirement

It is that modality in which the worker reduces his full working day to part time. In this way, beginning to collect the proportional part of the pension that, in this sense, corresponds to him.

Partial retirement can be made at a certain age, which is determined by law.

In this sense, the different ages to be able to access a partial retirement, as an example, in the case of Spain are the following:

  • If the company does not hire someone to replace the employee, the age will be the legal retirement age.
  • If the company hires another employee to replace it, the minimum age to access partial retirement is 61 years and 10 months; they must have contributed a minimum of 33 years.

Once the employee fully retires, the retiree, who has agreed through partial retirement, would collect 100% of the pension.

Flexible retirement or active retirement

Flexible retirement is that retirement in which the interested party can continue to develop, while already a pensioner, a part-time activity to supplement their pension.

This type of retirement can be confused with partial retirement, but they are not the same.

The main difference is that flexible retirement occurs whenever the worker has reached the legal retirement age, having made his ordinary retirement effective.

Delayed retirement

Delayed retirement is one in which workers who have reached their legal retirement age, wish to continue contributing and continue in their job. In this way, your working life is extended beyond the ordinary maximum contribution period.

In this way, the retiree who chooses this modality is applied an increase in the pension of up to 2.75% if they have more than 25 years of contributions. In addition, if there is a working life of more than 237 years of contributions, said pension increases by 4%.

These increases are capped at the limit imposed by law for the maximum pension.

Early retirement

Early retirement is a special type of retirement. That is, it is an alternative form of retirement, which is regulated by the company, after negotiating the agreed exit with the worker.

In this way, if an employee agrees to take early retirement by decision of the company, it must reach an agreement with him. The Government, since the financial crisis, requires companies to carry out this practice that they must finance two years of unemployment. In addition, to include people over 55 years of age in an ERE, the company must be responsible for paying the contribution to the employee up to the age of 61.

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