What is the contribution time retirement released by the INSS?

2023-07-01 04:28:02

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What is the contribution time retirement released by the INSS? The Social Security Reform changed retirement by contribution time and created 4 new transition rules, in addition to 3 others that already existed and can still be conquered by those who have acquired rights.

This variety of rules raises many questions about how each of these benefits is calculated.

Therefore, in this article, we will show you how to make and how to understand retirement calculation by contribution time in each of its modalities.

What is Contribution Retirement?

Contribution-based retirement is a type of benefit paid by the INSS that presupposes the completion of a contribution period to retire.

This type of retirement was one of the most affected by the Social Security Reform, which extinguished 3 rules that existed to create another 4 Transition Rules.

These new Transition Rules made access to retirement more difficult, requiring a few more requirements in addition to contribution time.

To count the length of service and check which benefits you are entitled to, use our Retirement Calculator, it is completely free.

How to calculate retirement by contribution time?

The calculation of all kinds of retirement for contribution time under the old rules (acquired right) is based on the average of the 80% highest salaries since July 1994.

Once you find this average, take the next step, according to the type of intended retirement:

Common contribution time pensionRetirement by contribution time by PointsProportional contribution time retirementMultiply the average of the 80% highest salaries by the Social Security Factor. The average of the 80% highest salaries will already be the retirement amount (does not apply the Social Security Factor). Multiply the average by 70% + 5% per year that exceeds the minimum necessary for reach the toll of 40%.

Some important notes:

Social Security Factor is a rate that takes into account the contribution time, age and life expectancy of the worker. The idea is that, the sooner he retires, he will supposedly receive the pension for a longer period of time, which would justify a lower retirement amount. Almost nobody manages to increase the 70% percentage in calculation of proportional retirement by contribution time, because those looking for this form of retirement usually only have the minimum time required.

The Pension Reform created new retirement calculation options based on contribution time in the Transition Rules. Check out the step by step on how to calculate these modalities:

The calculation for this Transition Rule is identical to that for Progressive Points:

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Find the average of all contributions since 07/1994. Multiply the average found by the initial coefficient of 60% and add another 2% for each year that exceeds 15 years of contribution for Women and 20 years for Men.Example of calculating Progressive Age:A woman with 32 years of contribution and an average salary of R$ 4,000. She will receive 60% + 34% (2% x 17 years more than the 15 years of contribution), totaling 94%. Multiplying the average of R $4,000 for 94%, the retirement amount will be $3,760.

To perform the calculation for the 50% Toll Transition Rule, follow these steps:

Calculate the average of all wages from 07/1994 onwards. Multiply by Social Security Factor.Example of 50% Toll calculation:A 55-year-old woman, 32 years of contribution and an average salary of R$ 4,000. Multiplying the average of R$ 4,000 by the Social Security Factor of 0.60, the retirement amount will be R$ 2,400.

Calculating the 100% Toll Transition Rule is the simplest to do:

Average all your salaries since 07/1994 Done! The average value will already be how much you will receive from retirement.Example of 100% Toll calculation:A woman with 32 years of contribution and an average salary of R$ 4,000. The average found is already the retirement amount, so she will retire with R$ 4,000.

Now that you know how to calculate all retirement rules based on length of service, you might be wondering: what is the calculation of retirement by contribution time which is more advantageous?

The answer to this question depends on several other factors, such as analyzing when you will be entitled to each of the rules and whether you will be entitled to other types of retirement, such as Special or by Age.