topics
tools
editor's choice

State and private schools in Spain

Festivals in Spain 2011

Should our kids go native too?

Childcare in Spain

Moving to Barcelona with children

Expatica countries
Index Last Var.(%)
BEL 20 2119.44 0.28
DAX 6339.94 0.38
IBEX 30 6543 0.13
CAC 40 3047.94 0.32
FTSE 100 5351.53 0.03
AEX 292.76 0.23
DJIA 12454.83 -0.60
Nasdaq 2837.53 -0.07
FTSE MIB 13154.8 0.36
TSX Composite 11576.47 0.09
ASX 4105 0.58
Hang seng 18710.05 -0.02
Straits Times 2770.77 -0.07
ISEQ 20 500.94 1.55
You are here: Home Employment Employment Information Seniors have reasons to keep working as youth protest

Employment & Trends

archive
Enlarge font Decrease font Text size


24/05/2011Seniors have reasons to keep working as youth protest

Seniors have reasons to keep working as youth protest Government provides incentives to postpone retirement beyond the age of 65. Original publishing date Jan. 2008

Jacobo Atienza, the head of the traumatology department at Gregorio Marañon Hospital in Madrid, recently turned 65, but he has yet to hang up his white coat. Like a growing number of Spanish workers - principally in highly specialised careers - he has decided to stay on beyond retirement age in order to continue to put his decades of experience to good use.

"I'm entitled to the maximum pension, which would be half of what I make now, but I haven't done it because of that," Atienza says.

However, since the start of the year Spanish workers do have a new financial incentive to continue working beyond the age of 65. Under a reform of the Social Security system that went into effect on January 1, workers will receive a 2-percent increase in monthly pension payments for every year they keep on working after reaching retirement age. The increase amounts to 3 percent if they already have 40 years of employment under their belts.

As a result, someone who retires at 66 and who would normally be entitled to the average pension (currently EUR 766.52 a month) would receive an additional EUR 15, or EUR 23 if they had worked for more than 40 years. The bonus increases without limit for every additional year of work, meaning that someone who stayed in their job until the age of 70 would receive EUR 850 a month, or EUR 900 if they had put in 40 years.

One important feature of the legislation is that there is no cap on how much someone will receive once they do decide to retire, largely because it is expected that those who continue working will mostly be professionals already entitled to the largest pensions. In that way, someone entitled to the maximum pension (currently EUR 2,384 a month) could substantially increase their retirement income.

Indeed, maintaining current income levels - together with the fear of being bored and unoccupied - is one of the principal reasons why workers seek to stay on beyond retirement age. For example, Joaquín Leguina, a Socialist congressman who will leave the chamber this year at the age of 66, has applied to return to his former job as a demographer at the National Statistics Institute (INE). "I still need a certain rhythm of work," says the former premier of the Madrid region. However, neither does he foresee himself ending his days at the INE - or in retirement. "After a while I'll find something else," he says.

But whether people keep working for professional or financial reasons, it is an inescapable fact that their continuing contribution to the labour market and to the Social Security system serves another purpose. With Spaniards' living longer, the burden on the welfare state is increasing, and will undoubtedly require more resources over the coming years. The EU estimates that by 2050 there will be 66 people retired in Spain for every 100 working.

The government's goal is therefore to ensure that people keep working as long as possible, and its first target is to take the age at which most people retire (currently 63.5 years) closer to the legal retirement age of 65. In addition to offering incentives to workers to stay on, the administration is also eager to change a business culture that has favoured shedding staff as soon as they near retirement age, often through early retirement programs that are harmful not just for workers, but also for the Social Security system.

January 2008

El Pais / Expatica


0 reactions to this article

Be the first person to add a comment

General rating: Not rated yet

Rate article:    Add my rating



0 reactions to this article

Be the first person to add a comment

Looking for a job?

Browse all jobs
Discussion Forums

Technology in Spain

Sat phones/internet links

English in Spain

What is the best travel insurance cover to Spain?

American in Spain

U.S. citizens, plan to vote in 2012? Did you know...

Relocation to Spain

thinking of moving to madrid

Jobs in Spain

Job Agencies or how to find work.

participate in the forums

Employment essentials
Employment expert Q&A
ask your question
Employment A-Z listings
find the business you need
Inside Expatica
Editor's Guide: Getting Started in Spain

Editor's Guide: Getting Started in Spain

Expatica's Getting Started section will provide practical information on how you can open a bank account, exchange your driving licence, improve your Spanish, and more.

Groups and Clubs in Madrid

Groups and Clubs in Madrid

Here's a guide to an extensive list of groups and clubs in Madrid for expats, from sports groups to social and family gatherings.

Groups and Clubs around Spain

Groups and Clubs around Spain

A brief introduction to our Tax section for Spain, from help with inheritance tax to accounting advice.

Groups and Clubs in Barcelona

Groups and Clubs in Barcelona

Here's a short introduction to our Banking section for those living in Spain, from what to ask the experts to opening a Spanish bank account.