INSS: how to retire after the Social Security reform – 10/24/2023 – Market

The worker who started contributing to the INSS (National Social Security Institute) after November 13, 2019, when the Social Security reform came into force, will retire under the permanent rule, with a minimum age of 65 for men and 62 years for women.

There is also a minimum contribution period requirement of 15 years for women and 20 years for men.

Before the reform, it was possible to retire without a minimum age, with the benefit based on contribution time. Five transition rules were also created to avoid harming those who already contributed to the INSS before the change in legislation.

How did the new rule turn out?

Anyone who started contributing after retirement must meet the following requirements to retire:

What changed in Social Security?

A person who started contributing after the start of the reform cannot retire under a transitional rule or under the requirements valid before the changes in social security legislation.

If Maria started contributing in January 2020, for example, she will only be able to retire from January 2035, if she has contributed every month and turned 62 years old.

In the rule prior to the reform, a woman could retire at age 60 and with 15 years of contribution and the benefit calculation was more advantageous for those who contributed above the minimum wage.

There was also the option of obtaining the benefit through contribution, with 30 years of payments to the INSS, with no minimum age. Thus, if Maria was 50 years old and had 30 years of contributions, she could retire. For men, the minimum contribution time was 35 years.

The reform also made special retirement more difficult, which started to require a minimum age as one of the conditions and ended with the conversion of special time into common time for activities carried out after November 13, 2019, which helped to increase the common contribution time of who worked for a period of time in places with risks to health or death.

Can someone who is 56 years old and has contributed 30 years retire?

Using our example, Maria started contributing in January 2020, when she was 26 years old. She will only be able to retire following the permanent rule approved in the Social Security reform, called scheduled retirement, at 62 years of age, as she had the first transfer to the INSS after the new legislation.

If Maria maintains payments until 2050, which would give her 30 years of contributions to the INSS, she will not be able to retire, as she will be 56 years old, six years younger than the minimum required for women, and will have to wait until she is 62. .

Therefore, she will only be able to request retirement from 2056, even with 36 years of contribution, if she maintains this transfer throughout the period. The total contribution time, however, will allow her to achieve a higher retirement.

How to retire with 100% of your salary?

The retirement amount will vary depending on the contribution period and the worker’s average salary. First, the INSS calculates the average salary and then applies the percentage corresponding to each insured person’s contribution time.

Men with 20 years of contributions to the INSS (240 months) and women with 15 years (180 months) will receive a pension equivalent to 60% of their average salary, which takes into account all salaries since July 1994.

The lowest amount to be paid is the minimum wage, and the maximum is the social security ceiling. Both change annually.

If the man has contributed more than 20 years and the woman has contributed more than 15 years, an additional 2% is paid for each extra year. For example, if Maria contributes for 25 years, she will have ten years more than the rule, which will be 20%.

Thus, her retirement will correspond to 80% of the average salary (60% + 20% for extra years). If she has an average salary of R$2,500, her retirement will be R$2,000, for example.

Workers who want to have 100% of the average salary — full retirement — will need to contribute for at least 40 years (men) and 35 years (women). If the person works more years, they will receive more than 100%. This does not mean, however, that she will have a pension equivalent to her last salary.

To calculate the average salary, it is necessary to add up all contribution salaries and divide them by the total number of months of contribution. There is a minimum divisor of 108, according to the rule established in law 14,331, of May 4, 2022.

If the number of months is greater than 108, the division will be made by the total number of months with contributions.

The law allows taxpayers to discard lower contributions, which could benefit them with a higher average salary and, consequently, a better retirement. The INSS carries out this operation, but experts recommend that the insured seek the help of an accountant or social security lawyer.

For example: José started contributing on December 1, 2019 with a salary of R$2,500. He maintained this remuneration for 200 months, totaling R$500,000 in contribution salaries. His average salary will be divided by R$500,000 by 200 months, which will give R$2,500.

However, if José chose to discard 110 contributions and maintain 90 months, he will add R$225,000. As the period of 90 months is smaller than the divisor, the average salary will be obtained by dividing the total salaries (R$ 225 thousand) by the minimum divisor of 108, which will result in an average salary of R$ 2,083.33.

In this case, disposal is not advantageous. It is necessary to simulate to know if the disposal will be good.

The example considers a fixed salary amount, but all contribution salaries are adjusted for inflation until retirement is requested.

How many years of contribution to retire under the new law?

The person who started contributing to the INSS after the 13th of November 2019 falls under the permanent retirement rule. The woman will have to make contributions to Social Security for at least 15 years and the man will need to contribute for at least 20 years.

But retirement will only be granted if the taxpayer also reaches the minimum age of 62 for women and 65 for men. Anyone who does not contribute for the minimum required time will not be entitled to receive INSS retirement.

_{Sources consulted: Ministry of Social Security; Hilário Bocchi Junior, social security lawyer at Bocchi Advogados; João Badari, judicial coordinator at Ieprev (Institute of Social Security, Labor and Tax Studies); and Paulo Bacelar, director of IBDP (Brazilian Institute of Social Security Law)}