When you retire you have a number of choices for your pension payment. And there is a new option now: a lump-sum payment. With this option you can receive part of your retirement pension in one go. This must be no more than 10% of your retirement pension. You can decide yourself what to spend this money on. You would then, however, receive a lower pension for the rest of your life.
You cannot opt for a lump sum just yet. Legislation is not yet in place. It may be possible to make use of this option from 1st January 2025 onwards. We will keep you informed of any changes.
Calculations not yet possible
The new rules have not yet been finalised. We therefore cannot yet calculate how much money you will receive in one go. You cannot yet see in My PME how much pension you will receive later if you opt for a lump sum payment.
Consequences for taxes and allowances
Because you receive a maximum of 10% of your retirement pension in one go, your income for that year will be higher. This may affect any allowances you get. For example, healthcare allowance and rent allowance. These allowances would then become lower or lapse.
And if you retire before your state retirement pension, you may pay more tax. After all, by withdrawing this lump sum your income may end up in a higher tax band. You may end up having a lower net amount than you expected.
The specific consequences depend on your personal situation and the amount paid out.
Choosing between a higher payment or lump sum
Are you retiring before your state retirement pension age? Then you may decide to start with a higher monthly pension payment. You would then receive a lower pension payment as of your state retirement pension age. You cannot combine this option with a lump sum payment. This means you choose between a temporarily higher pension payment and a lump sum payment.
Are you retiring at your state retirement pension age (or later)? Then, too, you cannot start with a temporarily higher monthly pension payment followed by a lower payment if you have chosen a lump sum payment.
Situations in which you cannot choose a lump sum payment
There are various situations in which you cannot opt for a lump sum payment:
- It is not possible in combination with a high/low pension (see above)
- If your pension is less than €594,89 per year
- If as a result of a lump-sum payment there is not enough pension left, therefore less than €594,89 per year
- If you are already (fully) retired.
Is a lump sum payment a suitable choice for you?
A lump-sum payment is an important choice. It may have major consequences. Whether it is a good choice for you depends on many factors. Do you have any questions regarding your pension options? Feel free to contact us.
Apply for your pension now
You can simply apply for your pension. You cannot yet indicate that you want to receive a lump sum payment. If the legislation comes into effect before your pension starts, you can still change your application. You cannot do this yourself. Contact us for this. We are happy to help you.
We will keep you informed
The legislation has not yet been finalised. You cannot opt for a lump sum just yet. As soon as more is known you will read about it here. Do you want to know more about all the changing pension rules? Then look at our page on the new pension system. Or look at information about the various pension options.