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Retirement is a significant milestone in the life of any worker. It is the moment when, after years of contribution, you finally you can enjoy of the fruits of your work and have more time to dedicate yourself to your interests and passions.
However, for many, the idea of having to wait until age 60, 65 or even 70 to retire may seem daunting. Fortunately, there are ways to retire before age 55, even within the government pension system.
Remember that retiring early requires careful planning and preparation. The objective is to guarantee a comfortable retirement and financially secure, regardless of when you decide to hang up your boots. Let's go?
Understanding the government pension system
Brazil's pension system, administered by the National Social Security Institute (INSS), is based on a simple distribution regime. This means that active workers contribute to the payment of pensions for inactive workers.
In this sense, the ability to retire depends on meeting certain requirements established by law. Retirement rules vary depending on the type of benefit.
Today, our country's pension system has three types of retirement: contribution time, age and special retirement.
Each of these modalities has its own criteria, which include minimum age, minimum contribution time and, in the case of special retirement, exposure to working conditions that are harmful to health or physical integrity.
To retire before age 55, you need to understand these rules and this may include contributing to the INSS From an early age, look for professions that allow special retirement or use the points system to retire early.
The points rule for early retirement
The points rule is one of the ways that allows workers to retire before the minimum age established by the Pension Reform of 2019.
This rule takes into account both the worker's age and contribution time, and the sum of these two factors must reach a certain number of points for retirement to be granted.
For men, the 95/105 rule is in effect. But what does it mean? Well, this means that the sum of age and contribution time must be 105 points. For women, the rule is 85/100, that is, the sum must be 100 points.
The importance of good planning: the 50% rule
One of the ways to retire early, established by the 2019 Pension Reform, is the so-called “50% Toll Rule”. This rule applies to workers who were less than two years away from retiring due to their contribution time when the reform came into force.
According to this rule, to retire before the minimum age, the worker must complete a “toll” equivalent to 50% of the time remaining to reach the necessary contribution time on the date the reform came into force.
In other words, if there was 1 year left until retirement, now it will be necessary to work another 1 year and a half (1 year plus 50% of the remaining time, that is, 6 more months).
If a man had 34 years of contributions when the reform came into force, he would need to work another 1 and a half years to retire.
This rule may be an option for those who were close to retiring when the reform came into force and wish to retire before the minimum age.
In any case, it is essential to make a careful planning to ensure that the benefit amount will be sufficient to maintain the desired standard of living after retirement.
Preparing for a safe and comfortable early retirement
The decision to retire early should not be taken lightly. It requires careful and strategic planning to ensure a safe and comfortable retirement.
The sooner you start planning for your retirement, the easier it will be to reach your goal. This includes starting to contribute to INSS as early as possible and maintaining a consistent contribution over the years.
Understand in depth the rules of Social Security and the different types of retirement. Knowing the requirements of each can help you determine the best strategy for your situation.
Pensions can be a complex topic, and having guidance from a professional can be very helpful. A pension lawyer or accountant can help you understand the rules, calculate contribution time and plan the best strategy for you.
Your age and the length of your contribution must be taken into account, and therefore early retirement may result in a lower benefit. Therefore, it is essential to have a savings and investment strategy to complement your retirement and guarantee a financially secure future.
