What Is a Lump-Sum Payment? And which one is better, Lump-Sum or Monthly Pension Payments?
Bullet repayment or mostly known as lump-sum payment is a large amount of money paid all in once. It is associated with pension plans and in some cases, you might be offered to choose between a lump-sum payment or a monthly payment. Both choices have pros and cons. For example, a lump-sum payment may be subjected to higher taxation, as opposed to a case in which a retiree may be old enough to give up on monthly payment in order to transfer the money to inheritances. Concerning regular payments, you can manage your money better as you might lose money in some investments or other situations. By receiving the money in a divided way you will have lots of chances. All in all, the right choice depends on the value of the lump sum versus the payments and one’s financial goals.