Large Lump Sum Payment When I Retire

The_Bill_S — Wed, 11 Feb 2026 09:52:24 GMT

I am expecting a large lump sum payment from my employer when I retire at the end of this year. Should I increase my withholding for this lump sum payment to avoid a big tax bill when I file my taxes? Is there anything else I should consider to reduce my tax bill?

Re: Large Lump Sum Payment When I Retire

TeriH — Wed, 26 Jun 2024 20:47:54 GMT

Great question!

You most assuredly should increase your withholding on this lump sum payment to anticipate the future tax on it. Most companies provide that option up front to help mitigate the tax burden. However, from personal experience, the withholding may still fall woefully short.

The best idea would be for you to use TurboTax's Tax Calculator to get an idea of the impact of this lump sum payment. (Please note, the calculator is still showing 2023 tax rates but it will update soon to be 2024.)

topic Large Lump Sum Payment When I Retire in Retirement tax questions

Large Lump Sum Payment When I Retire

Re: Large Lump Sum Payment When I Retire