From 28 August 2026, Spanish retirees will have more options to return to the labor market without completely giving up their pension. Royal Decree 416/2026 opens the door for the first time to making retirement compatible with self-employment and improves conditions for those who opt for part-time employment. In this post we explain the most relevant new features of the flexible retirement reform.
On 28 August 2026, Royal Decree 416/2026, of 27 May, will enter into force, which, within the framework of recommendation 12 of the Toledo Pact and the promotion of the permanence of active employees, aims to encourage access to the flexible retirement modality. This figure makes it possible to make the retirement benefit, once caused, compatible with work.
The increase in pensioners registered as job seekers, the difficulties inherent in returning to work for the senior group and that, as indicated in the royal decree itself, this modality has not achieved the expected results led to the approval of this new reform.
As the main novelty, flexible retirement will not be inexorably linked to the performance of part-time work as an employee.
From the entry into force of the regulation, the retirement benefit may also be compatible with the performance of self-employment, provided that the person has not been registered in such a situation during the three years prior to retirement. It is thus a matter of preventing the self-employed from retiring and resuming the same activity, demanding a real break and discontinuity between one situation and another.
Given the general rule of incompatibility of the retirement pension with work, the pensioner must previously notify the National Social Security Institute of the start of any work or activity, as well as changes in working hours or cessation.
In addition, the following new features introduced by the mentioned royal decree in the regulation of flexible retirement stand out:
- The range of part-time working hours for employees is extended. The previous regulations set the compatible working day between 25% and 75%. Now, the limits are between 33% and 80% relative to a comparable full-time person.
- The amount of the retirement pension compatible with paid work is reduced, as was the case with the previous regulation in Royal Decree 1132/2002, in inverse proportion to the reduction in working hours.
- As an incentive for the retired person to return to the labor market, if the pensioner waits at least six months from retirement to access flexible retirement, the compatible pension is increased according to the working day worked: an additional 25% for working days of 55% to 80%, and an additional 15% for working days of 33% to 55%. This mechanism seeks to reward a real return to the labor market after an effective rest period.
- In the case of self-employment, the retirement pension will correspond to a percentage of 25%.
- The contributions made during the flexible retirement situation will not improve the pension recognized or increase the economic delay supplement that would have corresponded.
- Exceptions are made in the cases of those who took early retirement for reasons not attributable to the person (collective dismissal, objective dismissal, bankruptcy, etc.) for whom the regulation does contemplate rules for calculating the new regulatory base and the percentage applicable according to the new accredited contribution period, and who, therefore, will be able to benefit from the new contributions to reduce or eliminate the reduction coefficients applied.
This royal decree, without a doubt, expands the options for pensioners returning to work, including for the first time the self-employed route, and offers economic incentives through which it is intended to stimulate the employment of retired senior profiles. However, we will have to wait for the period of the year that the Government itself has given itself to evaluate whether this new reform achieves its aims and objectives.
