Since its approval in 2019, the Pension Reform continues to impact millions of Brazilians. In 2024, new rules will come into effect, bringing significant changes to the retirement process. With the increase in the minimum age, adjustments to retirement points, and changes to benefit calculations, it is crucial to understand these changes to ensure effective retirement planning. In this article, we will detail the main changes to retirement in 2024 and discuss how they may affect your financial future.
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Transition Rules for 2024
Transition rules were created to soften the impact of the new requirements of the Pension Reform, especially for those close to retirement. In 2024, these rules will undergo further adjustments. The progressive increase in the minimum age and points required for retirement is one of the main changes.
Specifically, the points system continues to combine the worker's age with the contribution time. This year, women will need to reach 91 points, while men will need 101 points.
This gradual increase is part of a transition that is expected to continue until 2033, when men will need 105 points and women 100 points to retire. These changes are intended to ensure the sustainability of the pension system. However, they bring additional challenges for those who have already contributed for many years and expect to retire soon.
For example, a woman who will turn 57 in 2024 and has contributed for 34 years will reach exactly the required 91 points. This ensures the benefit without having to work for more years or reach a higher age.
However, if she wants a full retirement, she can still choose to continue contributing until she reaches a score or age that provides her with a more advantageous benefit.
Raising the Minimum Retirement Age
One of the most significant changes in the Pension Reform is the increase in the minimum retirement age. In 2024, this requirement will continue to increase according to the established schedule. For women, the minimum retirement age is now 62 years old, while for men, it is 65 years old. In addition, both must have contributed for at least 15 years.
This change has been a cause for concern, especially for those who started working earlier and were counting on the possibility of retiring younger. Raising the minimum age seeks to align Brazil with international standards.
In countries where life expectancy is higher and the elderly population is growing faster, these measures are common. However, for many workers, this means spending more time in the workforce before they can enjoy retirement benefits.
Changes in Retirement Benefit Calculation
Another area that has undergone significant changes is the calculation of retirement benefits. Before the Social Security Reform, the calculation was based on the highest contribution salaries over the worker's lifetime. This allowed lower salaries to be disregarded, which could reduce the benefit amount. With the new rules, all contribution salaries are now considered, which may result in a lower benefit.
In addition, the initial benefit percentage has also changed. Now, workers receive 60% of the average of all contribution salaries, with an increase of 2% per year starting from the 15th year of contribution for women and from the 20th year for men. This means that, to reach 100% of the average salary, a man will need to contribute for 40 years, while a woman will need to contribute for 35 years.
This new calculation requires careful analysis by workers. They should consider how continuing to contribute may influence the final amount of their retirement benefit. For example, someone who is close to completing 40 years of contributions may prefer to continue working for a few more years to ensure a higher benefit. In another case, they may choose to retire as soon as they meet the minimum requirements, even if they receive a lower amount.
Impact on Special Retirements
Special retirement benefits, intended for workers who work in unhealthy or dangerous conditions, were also affected by the Pension Reform. These benefits are important for professional categories that face high health and safety risks at work, such as miners, metalworkers, and health professionals who deal with biological agents.
In 2024, the reform will implement stricter rules for these retirements. Now, in addition to the minimum contribution period, a minimum age is also required. For example, workers who work in environments with permanent exposure to harmful agents must be at least 60 years old and have 25 years of contributions to retire. This change reflects concerns about the sustainability of the social security system, but it also places an additional burden on those who work in adverse conditions.
How to Prepare for the New Rules
Given these changes, retirement planning becomes even more essential. Workers need to review their contribution history, check which transition rule they fall under, and consider the new requirements to ensure they are not surprised when it comes time to apply for retirement.
It is recommended that workers keep up-to-date records of their contributions, using tools such as the National Social Information Registry (CNIS). This platform records all periods of contribution to the INSS.
In addition, consulting a pension specialist can be essential to avoid mistakes that could compromise the value of the benefit. The specialist can help maximize the value of the retirement, making the most of the transition rules and advising on the best strategy for each specific case.
Conclusion
The 2024 retirement changes bring significant challenges, but they also offer opportunities for those who are well-informed and prepared. Understanding the new rules is crucial to ensuring a smooth transition to retirement, maximizing benefits and ensuring the sustainability of the pension system.
Careful planning and proper guidance can make all the difference in ensuring that your retirement is safe and comfortable. Stay up to date on new rules and adapt your planning as needed to ensure that you can enjoy a peaceful and satisfying retirement.
