Self-employed retirement 2024: updated requirements and calculation

Nowadays, many people are considering starting their own business as self-employed workers to enjoy self-management, flexible work, vocational fulfillment, and greater opportunities for economic growth. However, despite all these positive aspects, there is a widespread concern: the retirement of self-employed workers. This raises questions such as: Are retirement benefits for self-employed workers the same as for salaried employees? What contribution model do I need to improve my future conditions if I become self-employed? What is the minimum pension? We will answer all these questions and more in the following post. Keep reading and don’t be left with doubts!

Who Can Retire in 2024?

In this new year that has just begun, these are the two groups of salaried workers who can retire:

• Ordinary retirement: Workers who have contributed less than 38 years to Social Security can retire at 66 years and six months. Those who have contributed 38 years or more can retire at 65.

• Early retirement: Workers who have contributed 38 years or more can retire early at age 63. Those who have contributed less than 38 years can apply for early retirement starting at age 64 years and six months.

As for the self-employed, these are the groups that can retire this year

In 2024, the retirement regulations for self-employed workers in Spain have undergone some important changes. Here’s a summary of the new retirement conditions for this year:

• Ordinary retirement age: The ordinary retirement age has increased to 66 years and six months for self-employed workers who have contributed less than 38 years to the Special Regime for Self-Employed Workers (RETA). However, those who have contributed 38 years or more can retire starting at age 65.

• Early retirement: Self-employed workers who have contributed 38 years or more can retire early starting at age 63. Meanwhile, those who have contributed less than 38 years can apply for early retirement starting at age 64 years and six months.

• Deferred retirement: Self-employed workers may choose deferred retirement, which means working beyond the ordinary retirement age. The bonuses for each additional year worked after the standard age remain at 4% of the ordinary pension.

• Active retirement: Self-employed workers can access active retirement between 66 and 67 years and four months, one year after their regular retirement age.

It is important to remember that these changes are part of a pension reform that gradually increases the ordinary retirement age from 65 to 67 years between 2016 and 2027. Therefore, it is essential to stay updated with the latest regulations to plan retirement properly.

Learn the Requirements Self-Employed Workers Must Meet to Access Early, Deferred, and Active Retirement

There are some exceptions regarding retirement that you should keep in mind, which vary depending on the new regulations. Pay attention to the following points!

Early retirement

• Be at least 63 years old and have contributed for a minimum of 35 years.
• Prove that at least two of those years were contributed within the 15 years prior to applying for early retirement.
• The pension amount to be received must be higher than the minimum pension that would correspond to the applicant upon reaching 66 years and 4 months of age.

Deferred retirement

• Have contributed for at least 15 years under the RETA or the General Regime.
• Have reached the minimum ordinary retirement age for the current year.

Active retirement

• At least one year must have passed since the ordinary retirement age.
• Have contributed enough years to be entitled to receive 100% of the pension.
• Not have benefited from bonuses or early retirement reductions.

What Will Be the Minimum and Maximum Pension for the Self-Employed in 2024?

In 2024, the minimum pension for self-employed workers in Spain will be set at €770.05 per month, while the maximum pension for those who have contributed at the maximum base will be €3,129.40 per month. In comparison, for salaried employees, the minimum contributory pension for 2024 will be €521.42 per month, while the maximum pension will be €3,175 per month.

It is important to note that although the figures may seem similar, there are significant differences between the pensions of self-employed and salaried workers, since the self-employed have the option to contribute based on a minimum or maximum base, which can result in lower pensions if they have chosen to contribute at the minimum base throughout their working life. On the other hand, salaried workers contribute according to their salary, which can result in higher pensions if they have earned higher wages during their careers.

One of the advantages of contributing as a self-employed worker is that they can change the base on which they contribute up to six times a year, always depending on their actual income for each fiscal year. Therefore, although minimum and maximum pension figures may seem similar, the individual circumstances of each worker —whether self-employed or salaried— can result in significant differences in final pensions. For this reason, it is essential that each worker understands these differences and plans their retirement accordingly.