Flexible retirement reform – Royal Decree 416/2026
2 june 2026 · Vilar Riba
The Official State Gazette (BOE) of 28 May 2026 publishes Royal Decree 416/2026, of 27 May, which primarily regulates the legal framework governing flexible retirement, as well as other related matters. This regulation shares the objective of previous reforms affecting other retirement schemes, such as active retirement and partial retirement, namely to systematize and further develop the rules governing the different forms of compatibility between retirement and employment or professional activity. It is scheduled to enter into force on 28 August 2026.
Flexible retirement and extension to self-employment
- Flexible retirement allows retirement pension recipients to combine their pension with part-time employment, ranging from 33% to 80% of a comparable full-time working schedule (previously, the range was 25% to 75%).
- Flexible retirement is now expressly extended to self-employment, provided that the individual has not been registered as self-employed under any Social Security scheme during the three years preceding retirement.
In both cases, it is mandatory to notify the National Social Security Institute (INSS) of the commencement, modification, and termination of the activity to be carried out alongside retirement.
Amount of the Compatible Pension
- When flexible retirement is combined with part-time employment, the pension is reduced in inverse proportion to the percentage of working time performed.
- If this is the first compatible activity and it begins at least six months after the pension has been granted, an additional increase is applied to the pension:
→ Working time between 33% and less than 55%: 15% increase.
→ Working time between 55% and 80%: 25% increase.
- In cases of self-employment, the compatible pension amount is set at 25% of the recognised pension.
Compatibility, Incompatibility and Effects on the Pension
- Flexible retirement is incompatible with permanent disability benefits arising from the activity carried out after retirement and with certain financial supplements (including delayed-retirement supplements and minimum pension supplements).
- In the case of the delayed-retirement supplement, payment is suspended for the duration of the flexible retirement period when it is applied as an additional percentage of the pension. If the supplement was received as a lump-sum payment, the individual may not opt for flexible retirement.
- Contributions made during flexible retirement do not increase the recognised pension or the delayed-retirement supplement, with one exception: in cases of early retirement for reasons not attributable to the worker and before reaching the ordinary retirement age, the termination of the compatible activity may lead to a recalculation of the regulatory base or a revision of the applicable percentage, depending on the additional contribution period accrued.
- Temporary incapacity benefits arising during flexible retirement are incompatible with the contributory retirement pension from the moment the activity ends and the individual is deregistered from the relevant Social Security scheme; in such cases, only the retirement pension will be paid.
- Regarding survivors’ benefits, beneficiaries may choose whether these benefits are calculated based on the deceased person’s status as an active worker or as a pensioner. In the latter case, the regulatory base of the retirement pension, including any applicable revaluations, will be used.
Entry into Force
The Royal Decree will enter into force three months after its publication in the Official State Gazette (BOE), namely on 28 August 2026.
This transitional period will allow for the adaptation of internal procedures, management criteria, and any necessary administrative developments before the new regulation becomes fully applicable.
