Defined Benefit Pensions: Take the Lump Sum or Lifetime Income?

Would you take a guaranteed income for life, or a lump sum that could potentially be passed on to your family?

In this episode, financial advisers Rob Goudie and Ash Rowan break down the key considerations around defined benefit pensions and the choices people may face as they approach retirement.

They discuss how defined benefit pensions generally work, why the options can vary between schemes, and the trade-offs between taking a lifetime pension, a lump sum, or a combination of both.

The conversation covers:

📌How defined benefit pensions are generally calculated
📌The appeal of a guaranteed, potentially inflation-linked income
📌Lump sums and the investment risk that comes with managing the money yourself
📌What can happen to a pension when you die
📌Why your relationship status and estate planning can influence the decision
📌Lifetime income products and annuities as another option
📌Strategies that may be available when moving a lump sum into super
📌What people approaching retirement should consider before making an election

One of the biggest takeaways? There isn't a single "right" answer. Defined benefit pensions can have very different rules and options, so understanding exactly what your particular scheme offers is critical before making a decision.

⚠️ General information only: This video is provided for educational and informational purposes and contains general commentary from financial advisers. It does not take into account your personal objectives, financial situation or needs, and should not be relied upon as personal financial advice. Defined benefit arrangements and superannuation rules can vary, so consider seeking professional advice before making financial decisions.

Want to take a deeper look at your own retirement planning?

Join Robert Goudie and Amy Lehmann at their upcoming seminar, “Retiring with Confidence and Understanding Division 296” on the 23rd September.

If you're in the Horsham and Wimmera region, come along to the Horsham Golf Club and keep the retirement conversation going.

Register for the seminar here: https://www.eventbrite.com.au/e/retiring-with-confidence-and-understanding-division-296-tickets-1996919639397

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Advice Disclaimer || Any advice given by the presenter/s has been prepared without considering your individual objectives, financial situation or needs. So, before you act on the advice you should think about whether the advice suits your objectives, financial situation or needs. If the advice relates to acquiring a financial product you should obtain a copy of the Product Disclosure Statement for that product and consider it before making a decision. This presentation has been prepared by Consortium Private Wealth Pty Ltd (ABN 74 616 250 965) (AFSL 495401). If you require advice which takes into account your objectives, financial situation and needs you should speak to a financial adviser.

Robert Goudie (ASIC Reg 235974), Ashley Rowan (ASIC Reg 433899), Rachael Todman (ASIC Reg 1270413) & Amy Lehmann (ASIC Reg 1292710) are Authorised Representatives of Consortium Private Wealth Pty Ltd ABN 74 616 250 965 AFS Licence 495401.