When you retire, you have a number of choices. Next year, if the present bill is passed, a new choice will be added. Namely, the possibility to receive up to 10% of your accrued retirement pension in one lump sum: a lump sum. The proposed effective date for this new choice is 1 July 2023. This means that you can make use of this choice if you retire on or after 1 July 2023. This date is only certain once the bill has been debated by the Lower House. However, it may also be later and/or adjusted.
*Update 5/7/2023: The expected effective date of "Lump Sum" has been postponed to July. 1, 2024. This effective date is also not yet certain. This is because the bill has yet to be approved by both the Senate and House of Representatives.
Take a maximum of 10% of your pension at retirement at one time
When you retire, you will soon be able to choose to take up to 10% of your pension in one lump sum. The government is adding this new option so that you can tailor your pension even more closely to your personal situation and future needs. You can use this amount to pay off your mortgage or for renovations, for example. The goal is up to you. You can make this choice only once: just before you retire. Because you receive a lump sum, your lifelong monthly pension payments will be lower.
Lump sum payment may affect benefits and taxes
What you should keep in mind is that withdrawing a lump sum may affect:
- any supplements you receive and
- the amount of tax you pay.
The lump sum increases your income. You should therefore seek proper information/advice. A financial advisor can help you determine whether taking out part of your pension at once suits your situation.
More information will follow later this year
Once the bill is passed and the effective date is certain, you can also make calculations in MyStaplesPension with a lump sum.