Early retirement in Panama: requirements and step-by-step calculation (2026)

"Early retirement" in Panama is not an abstract concept: it is a specific procedure of the Caja de Seguro Social (CSS) with concrete age ranges, contribution requirements and one detail that defines everything: they apply an age reduction factor.

This article is made for a single intent: "early retirement Panama".

For an overview (planning, normal age, base examples), use it as a complement to the hub: Retirement planning in Panama

Who it applies to

It applies if:

You contribute (or contributed) to the IVM scheme of the CSS and want to apply for a pension before the normal legal age.
You are within the early age range.
You meet the contributions for "full" early or you are interested in the proportional early option if you don't reach the minimum.

It does not apply (or the scenario changes completely) if you are in a special scheme or your case is for disability/survivor.

In those cases, this can serve as a base, but not as an exact recipe.

Requirements: early old-age vs proportional early

1) Early old-age pension (the "full" one within early)

Age (CSS):

Women: ≥ 55 and < 57
Men: ≥ 60 and < 62

Contributions (CSS):

216 contributions (if it applies to periods 2008–2012)
240 contributions (from 1 January 2013)

Practical reading: if you are planning today, the number that almost always concerns you is 240 contributions.

2) Proportional early old-age pension (if you don't reach 240 contributions)

This exists for the most common reality: people who are in early age but did not reach the "full" minimum.

Age (CSS): same range as early

Women: ≥ 55 and < 57
Men: ≥ 60 and < 62

Contributions (CSS):

2008–2012: 180 to 215 contributions
From 2013: 180 to 239 contributions

Key fact: this proportional early pension "will not have a minimum".
Translation: the amount can come out low if your base/average salary doesn't help.

Documents: what they will really ask for

Early old-age (CSS)

Copy of valid ID
Form for long-term economic benefits (download and submit)

Proportional early old-age (CSS)

Copy of valid ID
Copy of Social Security card
Last pay stub (if you are working)
Application form (same)

Anti-rejection checklist

Your ID is valid and legible.
You checked your contribution history (no missing months).
If you still work: keep recent pay stub/proof.
Clean, ordered copies (ideal: one single PDF when you submit).

Step-by-step calculation (with example)

Here is what matters: the CSS defines a base formula and then applies an age reduction factor.

Step 1) Define your "monthly base salary" (your reference)

In practice, you are looking for your contributable average (according to how CSS calculates in your case). Don't try to guess: your goal is to have a reasonable "average" number to simulate.

If you had years with better salaries, the average goes up. If you had gaps or contributed low, it goes down. That is literally the game.

Step 2) Calculate the base pension (before reduction)

According to the CSS, the pension is calculated as:

60% of monthly base salary
- 1.25% of monthly base salary for each 12 additional contributions above the required density

Simple formula:

Base pension = (60% + 1.25% × (extra_contributions / 12)) × base_salary

Where:

extra_contributions = total_contributions − minimum_required

Step 3) Apply the age reduction factor

The CSS sets it: the result is multiplied by a reduction factor according to your age, using the current table.

Final pension = Base pension × reduction_factor

And the most useful thing: the closer you are to normal age, the lower the reduction.

Example A: "full" early old-age with 240 contributions

Assumption (to simulate):

Woman, 55 years old
Contributions: 240 (typical current minimum)
Estimated monthly base salary: $1,000
Extra contributions: 0

Base pension:

60% of $1,000 = $600

Reduction factor:

The exact number depends on the current table and your exact age. To understand the impact, use an illustrative example:

Illustrative example:

If the factor were 0.85 → $600 × 0.85 = $510/month

Practical reading: early buys you time, but you pay for it with a lifetime monthly cut.

Example B: proportional early with 204 contributions

Assumption:

Man, 60 years old
Contributions: 204
Base salary: $900
Minimum for "full": 240 → you don't reach it here, so proportional
Extra contributions: 0

Base pension:

60% of $900 = $540

Illustrative example:

If the factor were 0.80 → $540 × 0.80 = $432/month

Reminder: proportional early has no minimum. If it comes out low, it comes out low.

FAQ

What is the age for early retirement in Panama?

CSS: women 55–56, men 60–61.

How many contributions do I need for early retirement?

For "full" early, the typical number today is 240 contributions (since 2013).
If you have 180–239, proportional early exists.

How is the amount calculated?

Base: 60% + 1.25% per 12 extra contributions (above the required minimum), then age reduction factor.

What is the difference between early retirement and normal retirement in Panama?

Early is applied for before normal age and that is why the CSS applies an age reduction factor. Normal does not carry that penalty for going early (though it still depends on base calculation and your contributions).

Can I apply for early retirement if I am no longer working?

Yes. The key is not being active, but meeting age + contributions in the IVM scheme. If you are not working, check that your contribution history is complete and without badly recorded gaps.

Sources & Foot Notes

[1] CSS — Early old-age pension (requirements and reduction)
[2] CSS — Proportional early old-age pension (contributions and "no minimum")
[3] CSS — Old-age pension (normal age and reference)
[4] CSS — Long-term economic benefits application (PDF)
[5] CSS — Pensions page (channels and general information)
[6] CSS — Resolution 39,389-2007-J.D. (PDF, regulatory base)
[7] Gaceta Oficial — Publication (March 2007, additional support)
[8] Panamá Digital — Proportional old-age pension (procedure summary)