Pensions are financial plans that provide income to individuals during retirement. They are designed to ensure that individuals have a steady source of money after they stop working, typically funded through contributions made during their employment. Pensions can come from employer-sponsored plans, government programs, or personal savings plans.
There are two main types of pensions: defined benefit plans, which guarantee a specific payout upon retirement based on salary and years of service; and defined contribution plans, in which the retirement benefit depends on the contributions made and the investment performance over time.
Pensions play a crucial role in retirement planning, helping to replace income that individuals lose when they retire from the workforce. They are a key component of social security systems in many countries, promoting financial stability for retirees.
Spain's pension reform introduces a 2.8% increase for most contributive pensions and a 9% increase for non-contributive benefits, retroactive from January 1. The reform includes a "minimum supplement" for specific…