Taxation of retirement benefits from pension promise
Hello, I (employee) will be retiring in 2024. I will then receive a pension from a former employer, to which I have not contributed, as it is based solely on my length of service. I have the following options:
1. A relatively low monthly pension for life;
2. A one-time lump sum payment;
3. Payment of the lump sum in nine equal annual installments, where the payment amounts are subject to a 5% annual interest rate from the occurrence of the event triggering the pension until each installment is due.
How are these options treated for tax purposes?
Thank you very much!
