Expatriation and retirement: the key is anticipation
29 June, 2018duguech
After many years of traveling the world, there comes a time in the life of the expatriate to choose their place of retirement, and with that, all the processes necessary to assure a good retirement.
Preparing for retirement can be a complicated task, and because of that, it is important to choose the place of retirement in advance. It could be Spain or another country you have previously worked in. In any case, the first thing to make sure of is that you are fulfilling all the requirements of the Social Security system.
Spain has a series of agreements signed with different countries and per these agreements, different norms are applicable for expatriates. In the case of Latin American countries, for example, there is the Multilateral Ibero-American Social Security Agreement, which is a means of coordinating different legislations of the region and produces the most favourable outcome for the worker. This is regardless of whether or not their country signed an agreement with Spain.
In the case of the European Union, the Community regulations establish what is called the mechanism of aggregation, which determines that each country in which the expatriate has provided services, calculates the corresponding pension for the contributing period. Once the calculation has been done, the worker receives the most advantageous pension.
There are also particular processes where the mechanism of aggregation would be applicable, but only in the cases that the expatriate cannot apply for retirement in Spanish territory. This is the case of Canada, Morocco, Chile, Mexico, the United States or Venezuela, that have established this in the agreements signed with Spain.
To guarantee a retirement that permits a decent quality of life for the expatriate and, in many cases, for their entire family, the most realistic thing to do is have a good pension plan. Unfortunately, state resources are increasingly less, and to have a good retirement, a good savings plan and pension plan are necessary, which can later be added to other types of assistance.
Before leaving a country, it is important to obtain an updated and accurate certificate of the working life in that territory. Records of tax retentions, number of the contributor, and whatever else necessary to correctly prove the request for retirement. If you have not done so yet, you still have time to request the necessary records to organize it.
When the time comes to request the pension, one must do so in the country of residence, unless one has never worked there, because the rules would not be applicable. If this is your case, retirement must be requested in the last country you paid taxes.
Good legal assistance immensely facilitates the process. One must review the state of the existing agreements between Spain and other countries in which one has worked. If there is no agreement on the subject of Social Security, the expatriate will only obtain what they have contributed in Spain, and the time working abroad will not count.
Fundamentally, the expatriate needs to be well informed about the corresponding certificates and documents that they must present to the Public Finance Systems. One must declare all earnings. Not doing so can result in fines and sanctions.
This information does not constitute under any circumstances legal advice, serving only for informational purposes. In case you need professional services in Global Immigration and Mobility, please contact us.
* It should be taken into account that the regulations of any of the countries analysed as well as the established procedures may change at any time and without prior notice.
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