To make a decision about how much you need to save today to have a good retirement tomorrow, it is important to know the size of the state pension that you will receive. Based on this information and an estimate of your needs in retirement, it is possible to establish a savings target that provides you with a supplement in the form of monthly income.

How much money do you think you'll need when you retire?

How much am I going to earn?

According to the Organisation for Economic Co-operation and Development (OECD), the retirement pension represents 82% of the final salary in Spain. The average for this rate, called the substitution or replacement rate, is 71% in Europe and 63% in OECD countries. The long-term forecast, according to the European Commission (EC), is for this percentage of coverage to fall to 40%, something that would imply retirement meaning losing 60% of your purchasing power.


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Source: OECD Data. Net Pension Replacement Rates

How much should you save

Juan, age 30

Gross salary 24.000€
Savings No
Retirement age 67 ages

Retirement simulation

Income expectations 1.613 €/month
Pension first year 1.321 €/month
Gap first year 292 €/month

Monthly savings needed to meet these expectations

107€

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Laura, age 45

Gross salary 30.000 €
Savings No
Retirement age 67 ages

Retirement simulation

Income expectations 1.941 €/month
Pension first year 1.748 €/month
Gap first year 193 €/month

Monthly savings needed to meet these expectations

179€

See except details

See month details

Annual increase 0,25%
Taxes 21%
Net return on investments 3%
Rate of percentage increase in standard of living 2,37%
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How much am I going to earn?

The best way to save is to be constant. Being in the habit of saving and having time on your side mean that the effort to reach the target will always be less. There are different ways to save for the future. There are different ways to save for your future, such as pension plans, systematic individual savings plans (PIAS) and individual insurance policies for long term saving (SIALP).

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Pension plans

Generate savings for your retirement that will supplement your state pension.

Availability

On the date of retirement, although it can be brought forward in other specific situations.

Other benefits

Important income tax savings.

Systematic Individual Savings Plan (PIAS)

Through flexible systematic contributions, the holder can generate capital for the future. The return will be based on the linked investment.

Availability

Immediate. It allows partial and full redemption, and the redemption value will be based on the market value of the investment.

Other benefits

Important tax advantages if a life annuity is chosen, at least 5 years after the first contribution.

Individual Insurance Policy for Long Term Saving (SIALP)

Through systematic and flexible contributions, the holder can generate capital for the future. The return will be based on the guaranteed technical interest rate.

Availability

Immediate. Only full redemption is allowed.

Other benefits

Important tax advantages if, at the time of redeeming the capital, at least 5 years have passed since the first contribution.

Frequently Asked Questions

Since 1 January 2013, the time of retirement has depended on the age of the person concerned and the social security contributions accumulated throughout their working life. The retirement age in Spain will gradually increase until 2027, when it will be 67 years old. In 2018 it will be 65 years and six months old for a full pension.

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You have the option to pay your own social security contributions through special agreements to maintain all of your pension rights. Talk to an advisor.

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The deceased person must have been signed up with the social security and be proven to have contributed over a certain period. The calculation depends on the status of the deceased (active worker or pensioner) and the cause of death (common or professional cause). Seek advice.

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