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What A Freelancer Needs To Collect 100% Of The Pension

Having a good pension with which to reach retirement is a concern that not only employed workers have to address, but it also extends to the self-employed. Although these self-employed workers have to obey some other peculiarity.

All the self-employed who do not take advantage of any of the early retirement modalities must be governed by the conditions that Social Security imposes on ordinary retirement. The first of them is the retirement age , which must be 66 years for those cases in which less than 37 years and three months have been contributed and 65 years for the rest of the self-employed.

In addition to reaching this retirement age, the self-employed must also reach a minimum of 15 years of contribution to be able to collect a pension, of which two must be given in the last 15 years. This is a requirement to simply be able to collect a contributory retirement pension. But what do you have to do to collect 100% of the pension?

The Social Security explains on its website that the retirement pension of self – recognized “under the same terms and conditions” of the self – employed, but the reality is somewhat more complex .

Let’s start with the similarities: the Social Security calculation method is the same and takes into account the contribution bases of the last 24 years (288 months) and divides them by 336 to get the value of the self-employed regulatory base, which at the dessert will influence the amount of the future pension.

The procedure for obtaining 100% of the pension (of the regulatory base) is also the same. To do this, they will have to work at least 36 years: the 15 years previously stated as a requirement give rise to 50% of the regulatory base or the minimum pension and, from there, 0.21% of the regulatory base is added. for each of the following 106 months of contributions and 0.19% for each of the following 146 months.

How to get a higher pension
Throughout this process, the self-employed person must face two caveats. The first one is that, unlike employed workers, they will not be able to benefit from the integration of gaps that allows filling with fictitious contribution bases (the minimum base for the first five years and 50% after) those periods in those where there was no contribution.

This represents an important obstacle in order to achieve a greater regulatory base, since all the self-employed who have seen their activity interrupted during the last 24 years will suffer reductions in the regulatory base without the possibility of avoiding the impact of those stoppages, which they can. do employed workers.

The second particularity is the contribution base of the self-employed. Although these workers can choose the contribution base they want between the minimum and the maximum ( there are four base changes per year ), the truth is that a good part of these professionals usually contribute by the minimum base , which has consequences on the amount of the pension.

The reason is that the minimum contribution base is 944.40 euros per month (very different from the maximum, which is 4,070.10 euros per month) and, to the obvious difficulties in obtaining 100% of the pension, it can be added the low amount of said benefit for those self-employed who contribute for the minimum base.

The solution , of course, is to quote by higher bases . When taking into account the contribution bases of the last 24 years, this is especially important at that stage (from 41 or 42 years). At this point, it is essential that the self-employed person knows that, from the age of 47, different rules apply to the contribution bases collected by Social Security :

-The self-employed with 47 years of age at the beginning of 2021 who have a contribution base of less than 2,052 euros per month will only be able to choose bases between the minimum base and 2,077.80, except for exceptions.

-The self-employed with 48 years or more at the beginning of 2021 will have a base of between 1,018.50 and 2,077.80 euros per month unless they have contributed for at least five years. In that case, if your previous contribution base was equal to or less than 2,052 euros per month, you can choose bases of between 944.40 and 2,077.80 euros per month. If your base is higher than 2,052 euros per month, you can choose any base between the minimum base and the base they had.