Should I get my super as a $1.7m lump sum, or a yearly pension?

July 26, 2026 — 3:01am

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I am 61 years old and intend to retire this year. I have the choice of taking either a $1.753 million lump sum or a defined benefit pension of approximately $135,000 per year plus a $174,000 lump sum. My superannuation will be my sole source of retirement funding. My main concern is that the defined benefit pension is not indexed, so its purchasing power will decline over time with inflation.

Given my age, retirement plans and reliance on super for retirement income, how would you assess the trade-off between the pension and the lump sum? 

Defined benefit pensions are very attractive in that the provider takes on all the investment risk. You are certainly right to be concerned about a lack of indexation, though, which is fairly unusual.

Ideally, get your financial planner to conduct financial modelling for you to understand the long-term difference between a lump sum invested........

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