by Per Svensson Spain is a good country to retire in, especially Marbella. But also retirement needs to be planned. We give information and advice. Marbella Spain

What is retirement?

Before starting to write this series of articles, I had to define for myself what I meant with retirement. Obviously it is in general terms, when a person stops working. Previously the period of retirement was a rather brief one, since legal retirement age was higher and the average life expectancy longer. The normal expression was "old age", "old age pensions", "old age housing".

Ten to twenty years ago we used to discuss the situation of the growing group of elderly people in Spain under the heading "tercera edad" - "the third age". But as retirement age has continued to fall and life expectancy continued to increase, it became clear that one could not lump everyone that had stopped working into one group, one had to differ between the "third age" and a "fourth age". Marbella Spain

That is why I will be using the expression "retirement" to describe the general situation of persons who have stopped working (meaning permanent employment or business), being aware of and trying to define the different stages of retirement, and their problems.

In my favorite English-Spanish dictionary (Langenscheidt) the word retirement is translated as "retiro", "jubilacion". Marbella Spain

Part retirement - anticipated retirement

Some people are retired, but not completely. They may still be working for their previous employer as need arises and capacity allows. Some have taken early retirement, calculating that their savings or pensions will see them comfortably through the rest of their lives. Others again have become redundant in their jobs, got a compensation and sent into involuntary retirement.

Others could have retired from their jobs or their businesses, but have not done so, for various reasons. It can be that they are still healthy and with abundant energy, that they have some tasks or goals that they want to achieve before pulling in the oars or that they are afraid that they will be utterly bored as retired (it seems I am describing my own situation here!).

But also the partly retired, or the ones still working full time after having reached retirement age, will meet the problems of the age group, sooner or later. The drug for everlasting youth has still not been found. Marbella Spain

The Spanish retired

We need to know the situation of the retired people in Spain, both to be acquainted with the conditions of our neighbors and friends, but also since some of us have been working or done business for many years in this country, contributing to the Spanish social security system and become or will be "pensionistas" here.

Basically the Spanish population has the same age structure as the population in the northern European countries, only some years delayed: The baby-boom came later in Spain , also the decrease in the birth rate that followed. For that reason, the aging of the population will also come some years later here. Marbella Spain

In 1992 Spain had 5.761.767 people above 65 years. Ten years later the number of inhabitants above 65 had reached more than 7 million. During the 20 th century the population of Spain doubled, but the group of people above 65 increased seven times, and the number of Spaniards above 80 years had multiplied by 13. This group represents today 3,9% of the total population and it is estimated that in 2050 it will have increased to 10%.

And when the generation of the Spanish baby-boom comes to pension age, the number of retired will reach 8,5 million people. A large number of them will have contributed to the social security system and will have a right to a public pension.

The new contributors Marbella Spain

Only a few years ago, Spain had a negative population growth, and it was feared that there would not be enough contributors to the social security system to pay the pensions of the increasing number of retired. But the strong influx of immigrants from the third world has changed the situation. Most of them are young people, able and interested in working and being part of the social security system of Spain . And they have many children, thus reversing the negative population growth and guaranteeing the pension payments to the retired of today and hopefully tomorrow.

In 1995 Spain had 12.3 million contributors to their social security system. In 1998 the number of contributors had increased to 13.6 million. But today it has jumped to 16.9 million (September 2003). While the number of unemployed at the moment is almost stable at around 11% of the active population (highest in the European Union), the authorities can each month report increases in the number of people affiliated to the social security system. The state budget for 2004 is based on an increase of 300.000 new jobs. Marbella Spain

In 1999 Spain spent 8,2% of it gross interior product on the social protection of the elderly, and more than half of it goes to pension payments. This is on a level with the percentages of most of the European countries. But the pensions in Spain are still very low, partly due to many of the elderly not having been part of and contributing to the pension system. The average pension paid out by the social security in 2002 amounted to 513 Euro per month. This includes an old pension system (SOVI) that only pays out 240 Euro per month. It has been indicated that the pension payments will increase only 2% during 2004. The trade unions maintain that 32% of the Spanish retired receive a pension below the minimum salary of 451 Euro per month, established by the government, while 2/3 of them receive a pension below 600 Euro.

The dependent Marbella Spain

In 1986 the Institute created a study group on the problems of the elderly among the foreigners in Spain . In a paper presented by John McMullen of the Javea Help and accepted by the study group was summed up the most desirable provision of a "Total Care" complex comprising:

•       Sheltered accommodation in bungalows/flats for the ambulant and independent elderly with a pool and social center.
•       Residential care in single bed sitting rooms, with provision of nursing services, as required, catering and laundry.
•       Full nursing care, in single or double rooms with full-time nursing.
•       Hospice type ward for the terminally ill.

As far as I know, such a "Total Care" complex has not been built, neither for Spanish, nor for foreigners. Instead we have got complexes addressing themselves to one or two of the groups described in the paper. One center can provid for group 1 and 2, in another 2 and 3 and in a third 3 and 4.

Without doubt there exists a great need for accommodation and services for the various stages between ambulant and independent elderly and the terminally ill.

72,8% of the persons above 65 years in Spain need care services. But only 344.000 persons out of a total of 1.300.000 receive this care. The rest must rely on assistance from their families.

Dwellings for the elderly Marbella Spain

82,6% of all Spaniards live in a dwelling they own themselves. The percentage is the same among the ones above 65 years. But while 87,9% of the ones between 65 and 69 years live in their own dwelling, the percentage sinks to 81,1 for persons above 69. The reasons are obvious: some must go into sheltered housing, some cannot take care of a big house and garden anymore and some leave the dwelling to the children or grandchildren. Some of the dwellings of the elderly are also very antiquated, 4,5% without hot water and 62,9% without heating.

75% of the people between 75 and 79 years live with their partners, and 28,5% of the ones between 65 and 69 years are still sharing their dwelling with children. On the one side the multi-generational family is on its way out in Spain , but the high costs of buying or renting a new dwelling forces the children to stay home to a higher age. Marbella Spain

Official statistics tell us that one of each four persons above 65 years needs assistance with some of the daily tasks, from 85 years one of each two persons need such assistance.

It is obvious that there is a great demand for adequate dwellings for the rapidly growing group of Spanish elderly. Some municipalities have built retirement homes, with economic support from the regional governments. But mainly it is foreseen that the market forces will resolve the problem, with a legal framework and financing from the authorities. Many homes for the third age have been built lately, with many different forms of payments.

The government has approved an "action plan for the elderly 2004-2007", that also affects the retired foreigners in Spain . We shall come back to this in a later chapter.

Permanently retired in Spain

The greatest part of the foreigners buying a property in Spain have the aim to retire under the sun, for all the year of for part of it. The new buyers tend to make the purchase some years before reaching retirement age, using the dwelling as a vacation home before that age.

When ending active work, the foreign owners can be classified in two groups:

The ones that sell out the dwelling in the home country and settle permanently and finally in Spain. Marbella Spain

And the ones that lives most of the year in Spain , especially over the winter, but go home for prolonged visits to their home country over the summer, and sometimes also over Christmas. They often keep a dwelling in the northern country, often a cottage on the coast or in the mountains.

In a very significant investigation among retired foreigners living in Spain , the researchers asked two questions:

Will you return to your own country if you or your spouse need assistance?

Would you stay on in Spain if there is an offer of assistance?

To the first question 24% answered NO, meaning that they under no circumstances would return to their home country. 32% answered POSSIBLY, meaning they were still contemplating the issue. 44% said YES, that they would go home when needing assistance.

On the second question 66% answered YES, they would stay on in Spain if offered assistance. 20% said they would POSSIBLY stay on, while 14% said NO, they would under any circumstances go back to Norway .

We are convinced that the reaction among the Norwegian retired is shared by retireds from other European countries living in Spain .

The interest of the emissary countries Marbella Spain

It is quite clear that it is economically interesting for Northern European countries that retired people live in Spain . Health services cost less in Spain (medics, hospitals and drugs) and the retired are less ill, due to a good climate and healthy menu. And the retired can lead a more active and meaningful life here, than in home countries where often snow and ice hinder any outdoor activity. That creates the positive-negative factor: the retired live 5-10 years longer when staying in Spain , meaning more years of pension payments for the public administration in the north...

A new model was introduced with the care-centre of the Norwegian municipality Bærum, where persons are being sent down for limited stays for recuperation or improvement in their illnesses. The centre was built for less than it would have cost to build it in the home municipality, and even with the transport from Norway to Spain and back, it is more economically to run. Other similar centres have been opened or are under preparation, by municipalities or social organisations.

It belongs to the picture that the waiting time for many kind of operations are long in Norway , like in most other Northern European countries. And there are private hospitals in Spain with great capacities, open for foreign patients, but even for foreign chirurgs.

The public administration in the northern countries would do their sick and elderly a good turn by opening up the possibility of stay and treatment in Spain . At the same time they could save the money of the tax payers.

And the Spanish advantages Marbella Spain

From time to time one can hear complaints from narrow/minded Spanish citizens, that the Europeans are occupying too many hospital beds or creating too great costs for the Spanish national health system. We are happy to know that this point of view is not shared by the immense majority of Spanish citizens, who know that the health bills of the Europeans are sent to and paid by their national security systems. Moreover they know that the foreign property owners are transferring an immense amount of money, to pay for the dwelling and for living in Spain . Exactly in the tourist areas this transfer goes into all strata of Spanish society, the taxes to the public administration, creating jobs in the construction and service industry for the workers, and to all kind of businesses.

We have been quantifying the foreign property owners investments in Spain in earlier issues of our Boletin, and for that reason shall not go into the details.

Moreover, it must not be forgotten that a great part of the infrastructure in Spain , also on the health sector, has been paid for by EU funds. And who have created those funds? The northern European taxpayers, now retired in Spain . This is a natural and correct situation in today's Europe .

The business with the third age

The increasing need for sheltered housing have brought a great number of big and small companies into the business of providing beds for the third age. The public administration has admitted they are not able to build the facilities, and they have ceded the ground to private business.

There are today 4.800 care centres in Spain , with 268.785 beds. In the 767 public centres there are 148.191 beds, in 316 centres with an agreement with the administration there are 19.968 beds, in 620 religious centres there are 40.479 beds, and in 3.197 private centres they have 148.191 beds. Total number of beds is 268.785. Compared with 7 million people above 65 years, this seems a very low coverage. The question is, of course, who can pay for living in a care centre? Only 35% of the elderly Spanish has a high purchasing power (from 840 Euro per month), while 56% is living on less than 420.

And the average price for full board in a care centre is from 18.000 to 21.000 Euros per year.

That is the reason why many of the existing private care centres are not filled, and some of them are trying to find customers among the foreign population.