When you retire, you have a number of choices. A bill has been submitted by the minister to add another choice. Namely, the option to receive up to 10% of your accrued retirement pension in one lump sum when you retire. 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 Second Chamber and the First Chamber. It may also be later.
The choice 'Lump sum' in brief
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. You determine the goal yourself. You can make this choice only once: just before you retire. Because you receive an amount at once, your lifelong monthly pension payments will be lower.
Another thing to consider is that withdrawing a lump sum may affect any allowances you receive and the amount of tax you pay. A financial advisor can help you determine whether lump-sum withdrawals are appropriate for your situation.
More information will follow later this year
Once the bill is passed and the effective date is certain, we will offer you more information about this new choice and you can also make calculations in the pension planner.