Spain retirement: December applications may reduce IRPF tax

In Spain, applying for early retirement in December rather than January can potentially increase monthly pension payments by reducing Income Tax (IRPF) retentions during the first year.

According to social security simulations, applying in December allows the pension to accrue from January of the following year. This timing ensures that social security revaluations are already applied and reduction coefficients may be more favorable. Furthermore, the timing affects how the Tax Agency calculates withholdings based on declared labor income for the fiscal year, which can result in higher net monthly amounts for those who time their application correctly.