At 75, David continues working in the plumbing business he began at 24. After more than five decades of self-employment, his monthly pension is about €500. He says the income would not be enough on its own without the savings and investments he and his wife built up during their working years.
David discussed his circumstances on La Linterna, a COPE radio programme. His wife receives a pension of around €1,000 a month, bringing their combined pension income to approximately €1,500. “My wife receives a €1,000 pension and I receive €500. If we hadn’t invested, it would be insufficient,” he said. Their savings and investments help cover household expenses. The €500 figure alone would not be enough for their retirement.
Long Careers, Modest Pensions
In Spain, a retirement pension depends on more than the length of a person’s career. It also depends on their contribution record, including the contribution bases used to calculate the benefit. This helps explain why a long working life does not necessarily lead to a high pension: contributions made at comparatively low levels can result in a lower benefit. Pension calculation rules also differ between the self-employed workers’ special scheme, RETA, and the General Regime for employees. In particular, the General Regime has a mechanism for integrating certain contribution gaps that does not apply to RETA workers in the same way.
Recent figures cited by Business Insider España put the average retirement pension for RETA workers at €1,062.09 a month; another reported figure for September is €1,062.80. These are averages, not guaranteed or minimum amounts. David’s reported €500 pension is less than half either figure. La Razón, citing Social Security statistics, reported an average of €1,734.70 for retirement pensions in the General Regime and €1,062.80 for RETA. That is a monthly difference of €671.90, or about 38.7% of the General Regime average. The figures vary by reference month and statistical release, but both comparisons show a large gap between the reported averages.
The annual uprating mechanism for contributory pensions applies across regimes; self-employed retirees do not have a separate general revaluation formula. Since the starting pension is often lower for RETA retirees, the same percentage increase adds fewer euros. For example, a hypothetical 3.5% rise on a monthly pension of €1,062.09 would add about €37.17 per payment, or roughly €520 across 14 payments. That example is not a forecast of a future increase.
Still Working After Retirement
David continues to work, but pension-and-work compatibility in Spain depends on the applicable legal arrangement and the individual’s circumstances. Active retirement is one route, with conditions on the pension payable and earnings. Social Security obligations also depend on the arrangement; other rules may apply to self-employed activity. Continuing to work after reaching retirement age does not, by itself, establish which route a person is using.
Planning Is Impressive
David’s experience shows why self-employed workers’ contribution histories matter. Contribution bases influence the eventual pension, while savings and investments can provide another source of household income. Spain’s Social Security system also provides a pension simulator that workers can use to estimate future benefits and consider how retirement timing may affect them.
His case brings into focus how contribution records shape pension outcomes and household finances. For self-employed workers, decisions made during their working lives, including the level of contributions, can shape the income available in retirement.
