A lump sum is a single payment of

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...

, as opposed to a series of payments made over time (such as an

annuity In investment, an annuity is a series of payments made at equal intervals.Kellison, Stephen G. (1970). ''The Theory of Interest''. Homewood, Illinois: Richard D. Irwin, Inc. p. 45 Examples of annuities are regular deposits to a savings account, ...

). The

United States Department of Housing and Urban Development The United States Department of Housing and Urban Development (HUD) is one of the executive departments of the U.S. federal government. It administers federal housing and urban development laws. It is headed by the Secretary of Housing and Urb ...

distinguishes between "

price analysis Price analysis is the study of how a price relates to other things such as product demand. Its specfici meaning varies in contexts such as marketing and general business. Marketing In marketing, price analysis refers to the analysis of consum ...

" and "

cost analysis In Production (economics), production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one o ...

" by whether the decision maker compares lump sum amounts, or subjects contract prices to an itemized cost breakdown. In 1911, American union leaders including

Samuel Gompers Samuel Gompers (; January 27, 1850December 13, 1924) was a British-born American cigar maker, labor union leader and a key figure in American labor history. Gompers founded the American Federation of Labor (AFL) and served as the organization's ...

of the

American Federation of Labor The American Federation of Labor (A.F. of L.) was a national federation of labor unions in the United States that continues today as the AFL-CIO. It was founded in Columbus, Ohio, in 1886 by an alliance of craft unions eager to provide mutu ...

expressed opposition to lump sums being awarded to their members pursuant to a new workers compensation law, saying that when they received lump sums rather than periodic payments the risk of them squandering the money was greater. ''

The Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nikk ...

'' reported in July 2011 that research by Prudential had found that 79% of polled

pensioner A pensioner is a person who receives a pension, most commonly because of retirement from the workforce. This is a term typically used in the United Kingdom (along with OAP, initialism of old-age pensioner), Ireland and Australia where someone of p ...

s in the UK collecting a company or private pension that year took a tax-free lump sum as part of their retirement benefits, as compared to 76% in 2008. Prudential was of the view that for many retirees, a lump sum at the time of retirement was the most tax efficient option. However, Prudential's head of business development, Vince Smith Hughes, said, "some pensioners are beginning to regret the way they used the tax-free cash. The days of buying a shiny new car or going on a once-in-a-lifetime holiday may be gone."

References

External links

SEC guidelines for lump sum payouts''Red Book - Form of Contract, Lump Sum Contracts''
Contracts Working Party, IChemE, 2001,
''The lump sum handbook: investment and tax strategies for a secure retirement''"> ''The lump sum handbook: investment and tax strategies for a secure retirement''
Anthony Gallea, Prentice Hall, 1993,
''Lump-sum distributions from retirement saving plans: receipt and utilization''
James M. Poterba, Steven F. Venti, David A. Wise,

National Bureau of Economic Research The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic c ...

, 1995
''Veterans' benefits; veterans have mixed views on a lump sum disability payment option: report to the chairman, Committee on Veterans' Affairs, House of Representatives''
DIANE Publishing,
''International claims: Their settlement by lump sum agreements''
Lillich, Richard B., Weston, Burns H., University Press of Virginia, 1975, {{ISBN, 0-8139-0642-3 Payments fr:Forfait

See also

References

External links