Spain updates flexible retirement and pension compatibility rules

Under the Spanish Social Security system, the flexible retirement modality allows pensioners to re-enter the workforce while maintaining a portion of their pension benefits. Following the implementation of Royal Decree 416/2026 on August 28, 2026, new regulations have expanded the compatibility between employment and pension payments.

For those engaged in part-time employment, the pension amount is reduced based on the hours worked, provided the compatible work represents between 33% and 80% of a full-time workday. A key feature of this updated regulation is the ability for retirees to recover 100% of their pension amount once the compatible employment activity concludes, subject to specific regulatory conditions.