Pension or lump-sum payment?
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When you want an optimum retirement solution, you don’t have to choose either a pension or a lump sum; if possible, take both. The ideal combination depends on your individual income and assets. In principle, your daily needs should be covered by your pension. Any additional amount taken as a lump-sum payment can be used to finance extras.

Should I have the retirement savings from my pension fund paid out as a lump sum, or should I draw a monthly pension for the rest of my life?

Lump sum withdrawal or a pension – that’s not even the question. What you need to ask is: “What financial resources will I need in old age to get by in daily life – including the occasional small luxury?“

The rule of thumb

It should be possible to cover your running costs out of your regular income – pension payments, interest earned on your assets and any other regular income streams. Depending on your individual needs, a lump-sum payment can be used to increase your budget, finance major projects, or be passed on to your descendants.

Analyze your personal situation

Your personal situation will dictate the best balance between regular pension payments and taking a lump sum.

A close analysis of your wishes and goals, as well as your family and financial situation, could mean that a combination of the two is a good idea. Draw a pension for the amount you need to cover your living costs, and use the rest of the capital you have accumulated as you choose. Or you can have the majority, or perhaps even all of your capital paid out. This allows you to benefit from more flexibility and scope to plan your individual finances.

Pension or lump sum: these are the benefits

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