Pension or lump sum

A pension provides you with a secure monthly income for the rest of your life. And if you die, your spouse will receive a survivor's pension, which is generally 60 percent of your original pension.

Good to know: There is no protection against inflation, meaning that the pension fund is not obliged to adjust your retirement benefits to account for higher costs. Your pension income will still be taxed.

A lump-sum payment gives you more room for maneuver when it comes to your personal financial planning. You're free to invest the money as you please, but at the risk of varying returns. And when you die, your heirs will inherit any remaining capital, though this is not the case with a pension.

Good to know: If you withdraw your pension as a lump sum, you will pay less tax.

As the name suggests, you receive some of your savings as a fixed pension, and some as a one-off payment. The combined option gives you the best of both worlds: the security of a regular pension with the flexibility of a lump-sum capital payment.

Establish the best way of combining a pension with a lump sum based on your personal situation. By carefully analyzing your goals, family situation and assets, you might find out that a mixture of lump sum and pension is your best option.