There are many people who decide, when retirement time arrives, to delay it. It may be because the pension they have left is not adequate, because they feel capable of continuing to work and want to do so, or a thousand and one other reasons. But do you know what are the advantages and disadvantages of delaying retirement?
Below we want to be objective and let you know what the pros and cons of delaying the retirement age are, because although it may seem like a good idea, sometimes it is not.
The advantages of delaying retirement
There are many reasons why people, even when they reach retirement age, decide to continue working. Sometimes it may be because they like their job so much that they don't want to leave it "overnight", while others are looking for a pension upgrade, or simply want to continue because otherwise they would have nothing to do.
Be that as it may and whatever the reason, there are certain advantages to delaying retirement. They are between them:
pension bonus
For each year worked beyond retirement age you will have an improvement in your pension. Obviously it's not too big, but sometimes it's worth it.
En general, the improvement is between 2 and 4% per year that it remains active and will always be applied to the regulatory base.
However, what not many know is that it is not enough to reach retirement age and that's it. But You have to meet certain requirements to get this improvement. Which? The following:
- Have at least 25 years of contributions when you reach retirement age. With this, if you continue working, you would get 2% more per year in active employment.
- If you have worked from 25 to 37 years, so the improvement is 2,75%.
- In case of having more than 37 years of contributions, the improvement will be 4%.
Increase the contribution period
Another advantage has to do with completing the pension at 100%. That is, if by staying a few more years it allows you to have 100% of the pension at the time of retirement, it will be very worth it.
This is one of the reasons why some last a little longer.
Maintain purchasing power
Because, with retirement, purchasing power is inevitably reduced but, in this case, by remaining active you can continue to maintain and at the same time get closer to that power with pension increases.
To feel useful
This is common in many people. And it is that, when retirement arrives, if they have been "working their whole life", they feel useless, and it is common for them to fall into depression or lose their physical form by moving much less. Therefore, in this case, there would be an improvement in physical and emotional health.
Por eso it is recommended to seek a hobby as retirement age approaches, as this way you can feel useful and encouraged to do things you like and have more time to dedicate to it.
The drawbacks of delaying retirement
As you can see, there are many advantages to delaying retirement. But not everything is 100% good. There is also a dark side to continue working after reaching retirement age.
You will not be able to enjoy retirement
Imagine that you retire instead of at the official retirement age of 75 years. At that age, there are much more chances of suffering from ailments and physical problems due to wear and tear on the body. This implies that you will not be able to fully enjoy your retirement, either because you have wear and tear, because there are illnesses, etc.
In other words, the years you keep working for "a better future" become only a "short-term future" and you may not be able to enjoy the fruits of your effort because you won't have much left.
There is a maximum amount
What do you say to me if I tell you that, even if you continue working for 20 years, you are not going to earn more than a cap? If this is in 3000 euros of pensionNo matter how many more years you work, thinking of improving it, you will not achieve it because the maximum amount is limited.
In other words, It doesn't matter how many years you continue working if you already reached the limit at a certain age set.
Job renewal issues
If a person continues to work beyond retirement age the only thing that is achieved with this is that young people cannot access that position since it is occupied and the company would not need a replacement. It is true that they continue to quote and contribute to the system, but young people find it more difficult to access the labor market and it is they who will maintain the pensions of the elderly in the future. If they do not have a job they do not contribute and, therefore, pensions would be in danger.
problems to work
In this case we are not referring to health problems, but to the fact that older people have much more difficulty finding a job due to the obstacles that are placed at a certain age (normally after 55 years).
With so many pros and cons to delaying retirement, which is better?
Actually there is no clear answer in this regard. We cannot tell you if it is better to delay it or not because it will depend, to a large extent, on your personal situation.
On the Internet you can find calculators that offer you an approximate figure if a person retires at the official age or if this status is extended for longer. This can give you an idea of what you could win.
However, You also have to take into account the type of work you do and the wear and tear which could mean the body is still active.
Our recommendation is that, if you are in this situation, put the benefits in one column and the drawbacks in another. Weigh them and choose the most suitable for you.
Do you know more advantages and disadvantages of delaying retirement?