From 2023, you can have a portion of your pension, up to 10%, paid out in one go on your pension date. This is called the 'lump sum amount'. Discover the benefits and risks here.
What does the lump sum amount entail?
With the lump sum amount, you can withdraw a maximum of 10% of your accrued pension once you retire.
Conditions for withdrawal
- Maximum 10% of your accrued old-age pension
- Withdrawal possible on pension date (or within 10 years before/after)
- You must apply for this in good time with your pension administrator
- Your monthly payment will be permanently reduced
Pros and cons
| Pros | Cons |
|---|---|
| Directly available cash amount | Always lower monthly payment |
| Option for mortgage repayment | Tax levied on the withdrawn amount |
| Settling debts | Risk of loss of benefits |
| Renovation or home improvement | No safety net for financial shortfalls |
Taxation on the lump sum amount
The withdrawn amount is taxed as income:
- Added to your annual income
- May lead to a higher tax rate
- Possible impact on benefits
Frequently asked questions about pension payout
Is withdrawal of more than 10% possible?
No, the law limits the withdrawal to a maximum of 10% of your old-age pension.
Does the lump sum amount affect my partner's pension?
Yes, the partner's pension may also be lower due to this one-time withdrawal.
Am I required to use the amount for debt repayment?
No, you are free to spend the amount at your own discretion. However, bear in mind the permanently lower monthly payment.
Legal support in Leiden
Do you have questions about your pension or the lump sum amount and do you live in Leiden? Contact the Juridisch Loket Leiden at Stationsweg 46 for free advice. For legal disputes, you can go to the Rechtbank Den Haag, Leiden location.
Practical questions and answers
How do I apply for a one-time payout?
You must arrange this in advance via your pension fund, often digitally or by post. Apply well in advance of your pension date. The fund will assess whether you meet the criteria and calculate the amount to be withdrawn. After approval, you will receive the money, but your monthly pension will decrease permanently.
What if I withdraw the amount in a year with high income?
The withdrawn amount counts as income and may push you into a higher tax bracket. This means more tax. Check your expected annual income and consult a tax expert if necessary to calculate the impact. It may be smarter to withdraw it in a year with lower income.
Can I use the money for a luxury holiday or purchase?
Yes, you may spend it freely. However, carefully consider the consequences, such as a lower monthly pension and fewer financial reserves. It might be wiser to invest it in something that saves costs, such as home insulation.