The government is now paying an annual lump sum if you delay retirement

Spain has one of the oldest work forces in the world. The Government is aware of this and is taking new measures to benefit people who stay at work longer past retirement age, including from this year, paying them compensation of between 4,400 euros and 12,400 euros for each year they continue working.

There are several incentives for delaying retirement in Spain, the most innovative is the possibility of receiving a lump-sum amount per year of delay, a single one-off payment that you receive, at the time you access your retirement if you have chosen to delay it.

The amount of this incentive varies depending on the years of credited contributions on the date on which you reach retirement age (not the day you retire), and is calculated based on formulas that can be found in the articles of the Law.

The formula varies depending on whether the worker has contributed for more or less than 44 years and 6 months, because if it is longer, the amount increases by 10%.

Here are some examples of the amounts available:
Single payment if you have a pension of 1,000 euros per month:
If you choose to delay your retirement for two years, you will receive:
12,000 euros (6,000 euros per year), if you have contributed for less than 44 and a half years.
13,200 euros (6,600 euros per year), if you have contributed for more than 44 and a half years.

Single payment if you have a pension of 1,600 euros per month:
If you choose to delay your retirement for two years, you will receive:
16,000 euros (8,000 euros per year), if you have contributed for less than 44 and a half years.
17,600 euros (8,800 euros per year), if you have contributed for more than 44 and a half years.

All figures are approximate and are higher or lower depending on how much pension you are due.

The extra percentage of 4%:
The other incentive being given by the government is an additional percentage of 4% for each full year contributed after reaching the ordinary retirement age, which means an increase in the amount of your pension.

You will receive this additional percentage when you retire and it will be applied each month to your pension for the rest of your life. Until now the incentive ranged between 2 and 4% but has now been fixed at the upper level.