The 2024 Budget Law has raised the minimum amount to obtain the early contributory pension: how much must the payments be to get there?
The 2024 Budget [1]in addition to having cut the experimental subsidized pension treatments, i.e. those with “lighter” requirements, such as Quota 103 and Opzione Donna, has also affected the types of early retirement provided for on a structural basis, i.e. not for a limited period, by the Fornero Law [2].
The Finance Act has, in fact, established more stringent requirements and disincentives for the so-called. early contributory pension at 64 years of agereserved for those who have not made payments prior to 1996 or who, despite having been registered for a long time, choose to have their contributions calculated (transferred) to the Separate Management [3].
Specifically, the Budget Law has tightened the conditions for access to this treatment, requiring, in addition to the age requirement of 64 years old and to the contribution requirement equal to 20 years of payments, a minimum “threshold amount” of the pension check, no longer equal to at least 2.8 times that of the social security check (1,496.35 euros for 2024), but to 3 times the social security check (1,603.23 euros). The amount remains fixed at 2.8 times the social security check only for women with one child and drops to 2.6 times (1,389.47 euros) for women with 2 or more children.
In essence, if the pension is below the threshold, you have to wait to leave work, INPS does not pay the benefit. But to obtain the early retirement at 64 years old when do I have to pay?
Reaching the minimum threshold can be more complicated for self-employed workers and freelancers, who face lower contribution rates (the percentages applied to income to be paid as contributions) than employees and collaborators.
It must also be considered that the new maneuver has introduced, for the first time, a waiting window equal to 3 months (so you retire at 64 years and 3 months) and a maximum amount ceiling equal to 5 times the minimum treatment (2,993.05 euros for 2024), until the age requirement for the ordinary old-age pension is reached (currently and at least until 31 December 2024 equal to 67 years).
The question arises, then, how many contributions are necessary to be able to obtain, from 2024, the early contributory pension and how much the salary or income must be to access this facilitated pension treatment, based on the new conditions. To answer the question, we have examined some situations.
Retirement at 64: How Much Should Your Salary or Income Be?
Get the early contributory pension at 64 years of agefor the majority of workers, will require in 2024 a total of payments, or contribution amount (the amount is the sum of contributions set aside and revalued annually) equal to at least 400 thousand euros, to be precise equal to a minimum of 398,813.43 euros.
This value, in fact, multiplied by the current transformation coefficient (the figure that transforms contributions into pension) relating to the 64 years and 3 months of age, i.e. 5.226%, leads to a monthly pension of 1,603.23 euros, 3 times the social security check.
Reaching such a total requires significant payments over the course of one’s entire career: considering the evolution over the years of the capitalization rate (the one through which contributions are revalued) and 20 years of payments, to obtain an amount of over 400.000 euro it would be necessary to pay, on average, 18,000 euros in contributions every year. This means having an average salary (or average compensation as a collaborator-parasubordinate) of over 54.500 euro per year, or an average income of 72,000 euros received as a freelancer registered with the Separate Management (or as a self-employed worker registered with the special INPS management, in the case of computation).
Retirement at 64: How Much Should a Woman’s Salary or Income Be With One Child?
Getting to the early contributory pension at 64 years and 3 months, for female workers with one child, will require in 2024 a total of contributions equal to at least 372.226,37 euro.
This value, in fact, multiplied by the current transformation coefficient relating to 64 years and 3 months of age, i.e. 5.226%, leads to a monthly pension of 1,496.35 euros, equal to 2.8 times the social security benefit.
Obtaining such a high amount requires annual payments of an average of 16,750 euros. Which means having an average salary of over 50.757 euro per year, or an average income of 67,000 euros earned as a freelancer or self-employed worker.
Retirement at 64: How Much Should the Salary or Income Be for Women with at Least 2 Children?
It’s easier (but not too much) to get to the early retirement at 64 years for women with at least two children. For them, obtaining this pension treatment will require in 2024 a total of contributions equal to at least 345.639,30 euro.
This value, in fact, multiplied by the current transformation coefficient relating to 64 years and 3 months of age, i.e. 5.226%, leads to a monthly pension of 1,389.47 euros, 2.6 times the social security benefit.
Obtaining a similar amount requires annual payments of an average of 15,550 euros. Which means having received an average salary of over 47.121 euro per year, or an average income of 62,200 euros as a freelancer or self-employed worker.
How to reach the minimum threshold for retirement at 64?
Based on the hypotheses analyzed, we observed that it is not easy to arrive at theminimum allowance required for the liquidation of the early contributory pension, for those with a low income or salary.
However, it should also be noted that the examples considered refer to a retirement with only 20 years of work: it is clear that the greater the years of contributions behind, the lower the salaries or incomes needed to reach the minimum threshold amount must be. In simple terms, the more years you have worked and paid, the lower the payments must be.
note
[1] Art. 1 Co. 125 L. 213/2023.
[2] Art. 24 Co. 10-11 DL 201/2011.
[3] Art. 3 DM 282/1996.