What will my retirement be like?

When is the right time to stop working? Do you meet the requirements for retirement? Do you already know when you will start enjoying the reward for working so many years in a stressful and sometimes unhealthy job?

Frequent and close contact with many customers, risks of contamination, contact with chemicals such as chlorine and mercury, noise from high-speed handpieces and suction pumps, electromagnetic radiation, damage to the cervical spine, shoulder injuries, and other problems.

You need to know the data and keep documents that record when you started working. You should begin retirement planning as soon as possible, whether by contributing to the INSS (Brazilian Social Security Institute), paying into a private pension plan, or seeking other sources of retirement income.

Birth Rate Statistics

The World Bank has warned that over the past 55 years the birth rate has fallen by 701 per capita (70% of births per 300 million people) while life expectancy has increased between 25 and 301 per capita (25% of life expectancy per 300 million people). Because of this, some European countries have been in turmoil due to public discontent with the imposition of new rules to try to balance pension accounts and avoid a collapse in these countries.

In 1960, a woman had an average of 6.07 children. However, 30 years later, in 1990, each woman had an average of 2.9 children. Now, in 2015, each woman has an average of 1.74 children. Over a period of 50 years, this represents a very significant decrease.

Life expectancy

However, when we look at life expectancy in 1960, the average Brazilian reached 54.24 years of age. In 1990, life expectancy jumped to 65.3 years. By 2015, life expectancy had reached 75.25 years. In 1960, these figures were considered those of developed countries, and Brazil dreamed of reaching that level.

These data demonstrate the advancement of medicine and the increase in the population's quality of life. This is very good; however, it places a greater burden on the working class.

The fact is that the population is aging due to the number of elderly people in relatively good health, and it is becoming increasingly difficult for young people who are working today to be able to work for themselves, to support the pensions of those who are already in that phase of life, and still have to work to support their own retirement.

The Brazilian Social Security System

I want to begin by discussing the Brazilian social security system and its problems. Then we will broaden the range of solutions available in Brazil and the need to look to other horizons.

The first thing you need to understand is what's called the Social Security Factor:

According to Brazilian legislation from the INSS (National Institute of Social Security), the term "social security factor" refers to a mechanism used in calculating retirement benefits based on length of service, which takes into account several factors, such as the insured person's age, length of service, life expectancy, and average salary.

In short, the purpose of the social security factor is to adjust the retirement benefit amount according to the insured person's life expectancy at the time the benefit is granted. The idea is to encourage workers to contribute for a longer period, considering that the earlier they retire, the longer the period of receiving the pension and, consequently, the greater the social security expenditure on benefit payments.

The calculation of the social security factor can result in a reduction or increase in the retirement benefit amount, depending on the insured person's personal factors. Generally, the younger the age and the shorter the contribution period, the greater the reduction applied to the retirement benefit amount.

The social security factor was established by Law 9.876/99 and can be used in retirement based on length of service, but is not applied to other types of retirement, such as retirement due to age or disability. It is important to note that calculating the social security factor can be complex, and it is often advantageous to seek guidance from a specialist to better understand how it can impact the retirement of a healthcare professional or any other worker.

The 2019 Pension Reform.

According to Brazilian legislation which came into effect after the 2019 pension reform, these new rules propose an agreement that takes into account three categories:

-Contributing professionals who had already completed 25 years of work by November 12, 2019.

-Health contributors who did not yet have 25 years of work experience, and,

Professionals who would be starting their work period on or after November 13, 2019.

The first option above falls under the old rule that gave dentists the right to retire after 25 years of work, without a minimum age and without the application of the social security factor.

But if you were already affiliated with the Social Security system on the date it came into effect, you enter a transitional regime. In addition to proving 25 years of special activity, you must meet a rule that adds your age to the time you worked in that activity. This calculation must result in at least 85 points. That is, if you worked for 32 years and are 54 years old, you do the calculation, 54 + 32 = 86 points, which initiates the minimum conditions to retire.

Finally, for dentists affiliated with the INSS (Brazilian National Social Security Institute) after the reform comes into effect, it will be necessary to be at least 60 years old and have contributed to the official social security system for 25 years.

The 2019 reform also established some rules for calculating the benefit. It takes an arithmetic average of one hundred percent of the contribution wages, applying a coefficient of 60 percent of the average benefit wage + 2% for each year of contribution that exceeds 20 years of contribution.

Did you understand? Me neither, so let's ask the university students for help:

Example of Calculation:

1. "Rule for calculating the benefit salary": The benefit salary is the base value from which the retirement pension will be calculated, based on the contributions made by the worker throughout their professional life.

2. “Simple arithmetic average of 100% of contribution wages”: this considers the simple arithmetic average of all contribution wages that the worker has received since July 1994 (or since the beginning of contributions, if they started contributing after that date). Therefore, this average includes 100% of the contribution wages, meaning all wages are considered in the calculation.

3. “60% coefficient of the average benefit salary”: After calculating the average of the contribution salaries, a coefficient of 60% is applied to this average. This means that, initially, the retirement benefit will correspond to 60% of the average of the contribution salaries.

4. “+ 2% for each year of contribution exceeding 20 years of contribution”: From the moment the worker completes 20 years of contribution, an increase of 2% is added for each additional year of contribution. This increase is applied to the average of the contribution wages.

Let's look at a hypothetical example:

Let's assume a dentist has contributed for 30 years. The average of his contribution wages is R$ 8,000.00.

1. Initial calculation: 60% of R$ 8,000 = R$ 4,800 (retirement benefit before the increase)

2. Increase due to length of service: 2% x 10 years (30 years of contributions – 20 minimum years) = 20%

3. Final retirement benefit amount: R$ 4,800 + 20% of R$ 8,000 = R$ 4,800 + R$ 1,600 = R$ 6,400

In this example, the worker would receive R$ 6,400 in monthly retirement benefits.

New concepts regarding unhealthy working conditions.

 Having understood this part, we must emphasize that there has been a significant loss for our category. The new text no longer benefits workers exposed to harmful conditions, known as "unhealthy working conditions," as this variable no longer influences income. Taxpayers no longer consider this type of retirement advantageous. The current rule maintains the same income values for all retirement cases.

Believe it or not, so far it's been easy. For professionals who were able to get everything in order from the early years of their careers, working as salaried employees for a company, through a health plan, or as a public servant, this might not be too difficult. However, for those who ventured out as freelancers from the beginning and experienced the ups and downs of the economy, they need to go through some stages:

The first thing you need to do is prove that you are practicing as a dentist under special conditions – for example, through a Technical Report on Environmental Working Conditions (LTCAT). You hire a safety engineer or occupational physician to prepare this document annually. This document assesses the working environment conditions, proving the routine exposure to harmful agents.

And another thing is, have you kept documents proving patient care, such as signed medical records with X-rays? Yes, from 20, 25, or 30 years ago? Anyway, it's possible that INSS (Brazilian Social Security Institute) analysts will ask you for these documents to verify the start date of your work in dentistry. In other words, you may have a lot of work to do, and this could extend the retirement application process.

Furthermore, is the Brazilian social security system reliable?

And there's always that question from the suspicious, those critical of the government: is the Brazilian pension system a pyramid scheme or not? Remember that there are pensions for former state employees paying amounts more than 40 times higher than the simulations above; where is the coherence in our pension system? In other words, how long will it take for the house of cards to collapse? Note that in countries like Australia, the difference between the base of a minimum wage and the top of government salaries reaches a maximum of 8.5 salaries.

These are the rules in effect at the time of publication of this article. Social security legislation may change over time; it is recommended to check the most up-to-date rules with the INSS (Brazilian National Institute of Social Security) or official government sources.

Take stock of your current situation. This article is to warn you about the harsh reality of the system. Plan ahead. next article Still on this topic, we want to present alternative paths to seeking greater tranquility.

Author: Nivaldo Pinho Gonçalves, Periodontist, CROSC 9696.