发布时间: 12/30/2025
Organized by: Cai Jialing
Image: Shutterstock (Illustrative, not actual subjects)
As we get closer to hanging up our work boots, many of us face a massive financial fork in the road regarding our Labor Insurance: Should we take the money and run with a lump sum payment to cover immediate needs like helping kids with a down payment or paying off a mortgage? Or should we opt for the monthly pension to guarantee a steady stream of income for the rest of our lives?
If you are tossing and turning over this decision, keep this simple rule of thumb in your back pocket: A lump sum is for your own enjoyment, while a monthly pension provides peace of mind for your entire family.
However, beyond just how you take the money, there is a huge misunderstanding that still trips people up. Many folks mistakenly believe, "It's fine, once I hit 65, I still have the Old Age Pension to fall back on." Here is the cold hard truth: the so-called Old Age Pension is actually the National Pension. Since October 1, 2023, the moment you start drawing Labor Insurance benefits (whether lump sum or monthly), you are barred from joining the National Pension. Worse yet, if you have never joined the National Pension system before, you won't see a single cent from it at 65. This is a common pitfall where many people accidentally lose out.
And there is yet another "hidden trap" in the Labor Insurance system that often goes unnoticed. Some people think they can game the system by maxing out their insured salary to 45,800 NTD for five years and then immediately dropping it to the minimum to save on premiums. This strategy is risky business. If things go wrong, it's not just a bad deal—it could cause your injury benefits, survivor annuities, and difference payments to shrink instantly, severely impacting your rights in your later years.
Lump Sum vs. Monthly Pension: Clearing the Confusion
Retirement planning is a major life event, yet many workers still harbor misconceptions about the two payout methods for Labor Insurance Old-Age Benefits. Labor Insurance expert Secretary Zhang warns that understanding the difference is crucial before making a choice, as it isn't just about the math—it's about the quality of your twilight years.
The Lump Sum Option: Cashing Out with High Risk
Many people, perhaps still feeling young or having met the seniority requirement (over 50 years old with 25+ years of coverage), choose the lump sum because "having cash in hand feels safest." But remember, claiming this benefit means you must withdraw from Labor Insurance entirely. This severs your connection to the system, meaning you cannot rejoin even if you work later. The consequences are significant:
1. Loss of Labor Insurance Protections: You lose access to injury, disability, and death benefits.
2. One-Time Deal: Once the money is paid, your fixed income stream from this source ends forever.
3. The Regret Factor: A large number of people use this lump sum for their children's housing or investments without precise planning, leading to regret when the funds dry up.
The Monthly Pension: Continued Protection and Stability
In contrast, while monthly claiming also requires withdrawing from insurance, why is it considered safer? Here are the advantages:
1. Steady Income: It acts like a salary for your retirement, giving you a sense of security.
2. Family Safety Net: If you pass away, your spouse and minor children can claim survivor annuities. In some cases, a spouse can receive this for life.
3. Guaranteed Difference: If you pass away before claiming an amount equal to the lump sum you would have received, your family can claim the difference.
What Exactly is the "Old Age Pension"?
When planning for retirement, many workers keep a mental note about an "Old Age Pension," thinking that even if their Labor Insurance payout is low, "It's okay, I'll get the Old Age Pension at 65." This is an outdated concept that needs to be retired!
In reality, eligibility for the National Pension is strictly tied to *when* you claim your Labor Insurance. If you opted for a Labor Insurance lump sum before September 30, 2023, and had less than 15 years of coverage or received less than 500,000 NTD, you might still have a chance to join the National Pension to add another layer of protection.
However, what people used to call "Old Age Pension" is now the "National Pension" benefit. If you have never joined the National Pension system in your life, you truly will receive zero at age 65.
Therefore, anyone preparing for retirement should double-check if their Labor Insurance and National Pension status conflicts or has gaps. Don't let a timing error cost you a safety net you were entitled to. If you are unsure, visit the Labor Insurance Bureau website or your local office to ask directly—it's the safest bet.
Don't Mess with Your Insured Salary! The 2 Major Traps
Furthermore, many friends in the workforce believe that once they have held the maximum insured salary for 5 years, they can immediately drop to the minimum bracket to save on premiums. Secretary Zhang offers a stern warning: Never drop to the lowest bracket in one go! It's not only financially unwise, but it may also trigger an audit by the Labor Insurance Bureau, jeopardizing your old-age benefits and your family's rights.
Trap 1: The Bureau is Watching
The Issue: Suddenly dropping from the highest salary bracket to the lowest after exactly 5 years looks suspicious. While it seems like a smart money-saving move, the Labor Insurance Bureau flags these anomalies.
If your "actual salary does not match your insured salary," your highest salary record could be cancelled. Suggestion: After reaching the 5-year benchmark at the highest level, maintain that bracket for at least another year. If you must lower it, do so gradually, never straight to the bottom.
Trap 2: Other Protections Slashed in Half
The Myth: Thinking that only the highest 5 years of records matter.
The Truth: Labor Insurance injury benefits, disability benefits, occupational accident insurance, and family death benefits are all calculated based on the average insured salary of the *last 6 months*.
If you drop from 45,800 NTD to 20,000-30,000 NTD, it might look like you are saving money, but your actual protection could instantly be cut in half! Additionally, the "difference money" (if you die young) is calculated based on the average of the last three years. Therefore, if you need these benefits, your later years could be exposed to massive financial risk.
Labor Insurance is Security, Not an Investment
"Taking a lump sum is like going all-in on a gamble—once you cash out, the game is over. Monthly payments are a steady stream that protects not just you, but your family." Before choosing between a lump sum or monthly payments, sit down and calculate your living needs. Don't try to save pennies today only to lose a fortune in security later.