More and more workers are choosing to extend their working life once they reach retirement age. To facilitate this transition, the Social Security contemplates active retirement, a modality that allows working and receiving a retirement pension at the same time, as long as certain requirements are met.
The pension reform has modified the conditions for access to this modality and has introduced a new system to determine the percentage of pension compatible with work activity. The goal is to encourage those who wish to continue working to do so without completely giving up their benefit.
What is active retirement
Active retirement is a modality of the Social Security that allows combining a contributory retirement pension with a job, whether as an employee or as a self-employed worker.
During this period, the pensioner continues to develop a professional activity and, at the same time, receives a percentage of their pension. The amount will depend on the time they have delayed their retirement compared to the ordinary age.
This formula seeks to take advantage of the experience of older workers and promote a gradual retirement instead of a definitive exit from the labor market.
Who can access active retirement
Not all pensioners can access this modality.
In general, the main requirements are:
- Having accessed ordinary retirement, not through early retirement.
- Waiting at least one year since reaching the ordinary retirement age.
- Having a recognized contributory retirement pension.
- Combining that pension with a work activity permitted by the regulations.
One of the innovations introduced by the reform is that it is no longer essential to have generated 100% of the regulatory base to access active retirement, eliminating one of the requirements that existed previously.
How much is received while continuing to work
The amount of the pension compatible with work depends on the time the worker has delayed their retirement.
The current system establishes an increasing percentage of the pension:
| Delay of retirement compared to the ordinary age | Percentage of pension that can be received |
|---|---|
| 1 year | 45 % |
| 2 years | 55 % |
| 3 years | 65 % |
| 4 years | 80 % |
| 5 years or more | 100 % |
In addition, for each full year that the worker remains in an active retirement situation, the percentage can progressively increase until reaching 100% of the pension when allowed by the regulations.
Self-employed workers can also benefit
Active retirement is also open to self-employed workers.
The reform has improved the regime applicable to this group and allows that, in certain cases, especially when they have contracted workers, they can combine a higher percentage of their pension with professional activity.
This modification aims to favor the continuity of small entrepreneurs and professionals who wish to continue developing their business once they reach retirement age.
During active retirement, contributions continue
Combining work and pension does not mean completely stopping contributions.
Workers under active retirement continue to make certain contributions to Social Security, although with a specific regime different from that of workers who have not yet retired.
These contributions do not generate a new retirement pension, but they do help finance the public system and cover certain contingencies provided for by legislation.
It is not the same as flexible retirement
Although both modalities allow continuing to work after retirement, there are important differences.
In active retirement, the worker already has their pension recognized and combines it with a job.
In flexible retirement, on the other hand, a pensioner returns to work part-time, reducing the amount of the pension based on the hours worked.
These are two distinct mechanisms, regulated with different requirements and effects.
It should not be confused with partial retirement either
Partial retirement responds to a different logic.
In this case, the worker reduces their hours before accessing definitive retirement and begins to receive only a part of the pension while continuing to work.
In contrast, in active retirement, the pension has already been recognized and the worker decides to continue developing a professional activity once retired.
An increasingly used formula
The aging of the population and the need to extend working careers have made active retirement an increasingly relevant tool within the public pension system.
Thanks to this modality, many workers can maintain income from both their work activity and the pension, while companies retain for a longer time the knowledge and experience of highly qualified professionals.