The Congress's decision to reject the elimination of penalties for early retirement for workers with long contribution histories has once again put the spotlight on early retirement, with a question that thousands of people ask themselves every year: how much money is lost by retiring before the ordinary age.
The issue is of particular interest to those born between 1962 and 1965, generations who have already reached or are approaching the ages at which early retirement can be considered. However, the answer does not depend solely on the date of birth. The years contributed and the time one intends to advance retirement also play a role.
Who can take early retirement in 2026
In Spain, the so-called early retirement is usually used colloquially to refer to early retirement. In 2026, the ordinary retirement age is 65 years for those who have at least 38 years and three months of contributions. Those who do not reach this period will have to wait until they are 66 years and ten months old.
Voluntary early retirement allows for advancing the ordinary retirement age by up to two years. This means that a worker who is entitled to retire at 65 can do so from the age of 63. On the other hand, those who need to wait until they are 66 years and ten months old will be able to advance their departure until they are 64 years and ten months old.
Those born in 1962 are closest to this situation during 2026. Many have already reached or will reach 64 years of age during the year and can begin to consider early retirement if they meet the requirements set by the Social Security. Those born in 1963, 1964, and 1965 still have a little more leeway, but they are part of the generations that pay the most attention to these changes because they are progressively approaching retirement age.
In any case, the year of birth is not the only determining factor. Two workers born in the same year may have different effective retirement ages depending on their contribution history.
How much money is lost by retiring early
The issue that most concerns those considering advancing their retirement is the effect on the pension amount. The current reduction coefficients depend on the years contributed and the number of months by which retirement is advanced.
The maximum penalty for voluntary early retirement reaches 21% for those who retire two years early and have contributed less than 38 years and six months. As the years contributed increase, the discounts are reduced. For those who have contributed between 38 years and six months and 41 years and six months, the maximum reduction is 19%. If between 41 years and six months and 44 years and six months have been contributed, the maximum discount drops to 17%.
Even those who accumulate very long working careers continue to suffer penalties. Workers with 44 years and six months or more contributed face a maximum reduction of 13% if they retire up to the permitted 24 months early.
Translated into concrete figures, the differences are significant. A person with a theoretical pension of 1,500 euros per month would see that amount reduced to about 1,185 euros with a 21% penalty. On the other hand, with a coefficient of 13%, the pension would be around 1,305 euros per month.
Precisely these reductions are what have fueled the political debate in recent weeks. Various pensioners' associations and some parliamentary groups argue that those who have worked for more than 40 years should not suffer discounts when retiring early. However, the proposal recently debated in Congress did not pass and the regulations remain unchanged.
Therefore, experts recommend not focusing solely on the year of birth. The years contributed and the time of early retirement are the elements that truly determine how much pension will be collected. To know the exact impact of early retirement in each case, the Social Security has simulators that allow estimating the amount of the benefit based on the personal circumstances of each worker.