Retirement planning isn’t exactly the most exciting topic over a morning coffee. But with Spain’s state pension system stretched ever tighter, thinking ahead just makes sense. The good news? You don’t need to be a financial wizard or earn a fortune to give your future self a leg up. All it takes is a bit of willpower—and a clever way to put that yearly tax refund to good use.

We’ve all been there: tax refund lands in the bank, and suddenly the world feels full of possibilities. Maybe it’s time for that weekend in Ibiza, or a couple of bottles of Rioja to celebrate surviving another tax season. There’s nothing wrong with a bit of fun, of course. But just imagine, for a second, that you decided to squirrel away that cash instead.

Here’s the trick. If you regularly get money back from your IRPF declaration each year, you’re already ahead of the game. That’s a steady, annual sum that could quietly work in your favour—especially if you’re not someone who’s great at regular monthly saving.

It might sound a bit grown-up, but Spain has a few clever products designed for exactly this sort of “bonus money”. You’ve probably heard of pension plans (those you can’t touch until you retire), and maybe the PIAS (think of them as more flexible savings insurance, with nice tax perks if you stick with them for at least five years).

Imagine sending your refund straight into one of these each summer. You’d barely notice it’s gone—but in a few years, you’ll suddenly have a tidy nest egg you’d never have managed otherwise. The best part? That’s money you didn’t miss, working behind the scenes while you carry on with your life.

If you’ve never really got your head around compound interest, here’s the cheat sheet: it’s basically interest on your interest. So your money earns a bit this year, then next year it earns a bit more, and so on. It’s painfully slow at first, but give it time and you’ll be amazed at how quickly things snowball.

Let’s say you get a €500 refund each year, pop it into a plan that earns six per cent, and never touch it. In 20 years, you’ll have nearly double what you put in—without having to sacrifice your monthly takeaway or coffees. Not bad, right?

Here’s where things get real. Recent studies reckon that by the time most of us retire, the state pension will barely cover the basics—certainly not if you want to splash out on a few extras, or pay for extra help around the house if you need it. Right now, the average cost of care for elderly people in Spain is about €20,000 a year. That’s more than most pensions, by a long shot.

So instead of leaving your future self at the mercy of whatever the government decides, why not give yourself a backup? All it takes is the small sacrifice of skipping a couple of treats now, and putting your tax refund on autopilot.

Look, no one is pretending this is as fun as a new TV or another city break. But you don’t have to be a finance geek to see the appeal of a future where you’re not panicking about bills, or worrying about relying on family. And if you ever find yourself chatting with friends over tapas, you’ll know you’ve done something clever—quietly, without fuss, and without giving up the good things in life.

So next time you see that “devolución” land in your bank account, have a little celebration… then ask yourself: “Could I make this work harder for me?” You might just find your future self raising a glass in your honour.

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