What is a flexible retirement pension?

What is a flexible retirement pension?

Incompatibilities with retirement

Royal Decree 1132/2002, of October 31, 2002, implementing certain precepts of Law 35/2002, of July 12, 2002, on measures for the establishment of a gradual and flexible retirement system.

The basic objective of the aforementioned Law is to establish a flexible retirement system which, while allowing, in certain cases, early retirement before reaching the ordinary retirement age, tends to favor the prolongation of the activity of older workers, thus promoting their active social presence, with the undoubted advantages, both for the workers themselves and for the pension systems.

The new scale of coefficients reducing the amount of the pension, in the cases of early retirement, is also applied to those cases in which the access to this modality is produced by application of the third transitory provision of the General Law of the Social Security.

Retirement Pension

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There are a series of requirements to be able to apply for active retirement. This type of retirement is reserved for certain types of workers and only for those who are going to work in the private sector. A civil servant can never keep his job and be retired at the same time.

Those who meet these conditions will be able to enjoy active retirement, which allows them to collect part of their pension with a full-time or part-time job and also as a salaried or self-employed worker. In this sense, the option of being self-employed and collecting the pension is the most widespread alternative.

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The exception to the rule is the self-employed. As a self-employed person, you can collect 100% of the pension with active retirement as long as you have a worker on your payroll as an employee (self-employed persons to whom you contract services are not valid).

My retirement pension

Broadly speaking, it makes it possible to combine the receipt of a pension with a part-time contract, by means of a reduction in working hours of between 25% and 50%, or, in other words, the pensioner must work between 75% and 50% of a full-time working day.

As we have seen, in the flexible pension, the amount to be received is reduced in inverse proportion to the reduction in working hours compared to a comparable full-time worker. There is a reduction in the pension from the day on which the activity begins.

What both types of retirement do have in common is that, when the worker decides to retire full time, he/she will receive 100% of the pension to which he/she is entitled, which will also be subject to revaluation.

Active Retirement

Today in our blog we talk about flexible retirement, a retirement modality that is not as well known as others. We are going to explain to you what flexible retirement consists of, as well as the differences it has with respect to active or partial retirement -since they can be confused as they are somewhat similar-.

In flexible retirement, a work activity is made compatible with retirement, so that we receive income for both concepts. But it is strictly necessary that the work begins after we are declared pensioners, not before. And it is not possible to be employed full time, but only on a part-time, reduced schedule.

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Therefore, a flexible pensioner is a person who, once retired, stops receiving a certain part of his or her pension because he or she decides to spend a certain amount of time per day working. This can be an excellent solution for people who do not wish to be totally inactive after the normal retirement age.

However, for the purposes of health benefits, these holders are recognized as pensioners. But the recognition of any permanent disability derived from the short-time work we have been doing is not valid.

What is a flexible retirement pension?
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