From 2023, you may withdraw a maximum of 10% of your pension in one go on your pension date. This is called the 'lump sum'. Discover the benefits and risks.
What does the lump sum entail?
With the lump sum, you can have up to 10% of your accrued old-age pension paid out in one go on the date your pension starts.
Conditions for withdrawal
- A maximum of 10% of your old-age pension may be withdrawn
- Only possible around your pension date (up to 10 years before or after)
- You must apply for this in good time with your pension administrator
- Your monthly pension payment will be permanently reduced
Pros and cons
| Advantages | Disadvantages |
|---|---|
| Freely disposable amount of money | Permanently lower monthly pension |
| Option for mortgage repayment | Tax levy on the payout |
| Reduce debts | Risk of loss of benefits |
| Renovation or home investment | No security with quick spending |
Tax rules for the lump sum
You pay income tax on the lump sum:
- It counts as income in the year of withdrawal
- You may fall into a higher tax bracket
- Possible effect on benefits
Frequently asked questions about pension withdrawal in Zoetermeer
Is withdrawal of more than 10% possible?
No, the law limits the withdrawal to a maximum of 10% of your old-age pension.
What does this mean for my partner's pension?
The partner's or survivors' pension may be lower due to the lump sum withdrawal.
Am I required to use the amount for debt repayment?
No, you are free to spend the amount at your own discretion. However, take into account a permanently lower monthly pension.
Legal support in Zoetermeer
Do you have questions about the legal aspects of the lump sum or want advice on the consequences? Contact the Zoetermeer Legal Advice Centre for free advice. For disputes about your pension, you can go to the District Court of The Hague, under which Zoetermeer falls.
Practical questions and answers
How can I apply for the lump sum?
You apply for this with your pension fund, often via a digital form or in writing. Do this well in advance of your pension date. The fund will assess whether you meet the requirements and inform you about the amount to be received and the reduction in your monthly payment.
What if I withdraw the amount in a year with high income?
The amount counts as income, which may lead to a higher tax rate. This means you pay more tax. Use a tax calculator or consult an advisor to determine the impact and possibly choose a year with lower income for withdrawal.
May I use the amount for a luxury holiday or purchase?
Yes, you are free in how you spend it. However, consider the consequences: your monthly pension will decrease permanently and you will have less reserve for unforeseen expenses. Consider alternatives such as repaying loans or investing in your home.
How do I know what 10% of my pension is?
Your pension fund can inform you exactly about the amount. This is often stated in your annual overview. You can also make a rough estimate yourself by multiplying your gross annual pension by 0.10, but take tax deduction into account.