Don't Rush to Withdraw at Age 60! Experts Reveal 3 Benefits of Leaving Your Labor Retirement Fund Untouched Instead of Taking a Lump Sum or Monthly Payout

Recent stock market volatility has brought retirees’ top concern into focus: Will the retirement funds in their labor retirement accounts shrink along with market fluctuations? According to the latest statistics, the Labor Retirement Scheme Fund achieved a return rate of 28.19% by the end of June 2026, translating to an average distribution of approximately NT$116,000 per worker. This government-managed and professionally invested retirement fund is often described as a "government-managed ETF for workers."

However, for workers aged 60 who are preparing for retirement, the real challenge isn’t how much the fund earns, but rather: "Should I take this money as a lump sum, receive it monthly, or simply leave it untouched?"

Labor insurance expert Zhang Mishi warns that each of these three methods suits different individuals, and many people mistakenly confuse "labor insurance" with "labor retirement." It’s essential to fully understand the withdrawal rules under the new labor retirement system before making a decision.

### Labor Retirement Is Not Labor Insurance! Understand These 3 Key Points Before Deciding How to Withdraw

Zhang emphasizes that before workers consider whether to take a lump sum or monthly payments, they must first grasp three crucial concepts:

1. **Your Labor Retirement Account Moves With You—The Funds Belong to You**

The new labor retirement system operates on an "individual account basis," meaning the money in the account belongs entirely to the worker. Currently, the Labor Insurance Bureau manages and invests these funds on behalf of workers. Even if you change jobs in the future, your accumulated retirement years and account assets won’t disappear with your employer—they continue to accumulate. Therefore, workers don’t need to worry about losing previously saved retirement funds due to job changes.

2. **You Can Only Withdraw at Age 60—No Early Access Like Labor Insurance Annuities**

The basic withdrawal age for the new labor retirement system is 60. Unlike certain provisions under labor insurance old-age benefits, which allow early withdrawal at a reduced amount, the labor retirement scheme generally requires workers to wait until they turn 60 to apply for withdrawals.

3. **Monthly Payments Are Not Lifetime Annuities—Payments Stop When Funds Run Out**

This is a common misconception among workers. The labor retirement individual account holds a "fixed" asset. If you choose monthly payments, the disbursement typically spreads over about 20 years. Once the account balance is depleted, the monthly payments stop. This differs fundamentally from labor insurance old-age annuities, which provide lifelong monthly payments.

Moreover, once you opt for monthly payments, you cannot later reverse your decision and switch back to a lump-sum withdrawal. Therefore, the choice of withdrawal method must be carefully evaluated in advance.

### Lump-Sum Only for Under 15 Years; 15+ Years Grants Choice

Whether you can choose monthly payments depends on your contribution period under the new labor retirement system.

Workers who contributed for less than 15 years under the new system can only choose a lump-sum withdrawal upon reaching age 60. Those who contributed for 15 years or more can choose between a lump sum or monthly payments.

Therefore, not all workers aged 60 have the freedom to choose between both options.

### Lump-Sum Offers Flexibility—but Big Payouts Carry Risks

The biggest advantage of choosing a lump-sum withdrawal is high financial flexibility.

Once the retirement funds are deposited in full, workers can reallocate assets according to their own financial plans—for example, investing in other relatively stable instruments. If you possess financial literacy and investment skills, you may have the opportunity to grow your retirement savings through strategic asset allocation, achieving a "money-making-money" effect.

However, the drawbacks are also evident. Suddenly receiving a large sum after retirement, without long-term financial planning, can lead to rapid spending. Additionally, if the lump-sum amount is substantial, it may trigger income tax implications—exceeding relevant tax-exempt thresholds could result in tax liabilities.

### Monthly Payments Provide Stable Cash Flow—Remaining Balance Continues to Grow

For those uncomfortable managing large sums and who prefer a fixed monthly income during retirement, monthly payments offer a simpler solution.

One major benefit of monthly payments is the creation of a steady cash flow, providing a reliable income source for daily living—especially suitable for workers with straightforward lifestyle needs who want to reduce financial management stress. Furthermore, during the monthly payment period, any remaining balance in the labor retirement account stays in the account and continues to participate in the investment earnings distributed by the Labor Fund. So, even after choosing monthly payments, the unclaimed portion of your funds doesn’t stop working.

However, the biggest drawback of monthly payments is lower financial flexibility. If you face unexpected major medical expenses, family emergencies, or other urgent cash needs after retirement, you cannot withdraw the remaining balance all at once, unlike with a lump-sum option.

More importantly, once you choose monthly payments, you cannot later revert to a lump-sum withdrawal. Therefore, it’s best to assess your total assets, medical emergency funds, and regular expenses before retiring.

### Not Withdrawing Immediately Is Also an Option? Experts Share Their Own Retirement Fund Strategy

If you’re neither skilled in investing nor worried about losing flexibility with monthly payments, are you really limited to just two choices?

Zhang Mishi shares her personal strategy: she chooses to receive her labor insurance old-age annuity monthly as her daily living expense, while leaving her labor retirement funds untouched in the Labor Insurance Bureau’s individual account for now.

She believes this approach balances daily cash flow with long-term asset accumulation and highlights three key advantages:

#### 1. Continued Participation in Investment Gains—Letting Retirement Funds Keep Growing

The first benefit is that by not withdrawing immediately, the funds remain under professional government management and continue to benefit from the Labor Fund’s investment returns. For those unfamiliar with investing or who prefer not to bear the pressure of market operations, this is like entrusting your capital to a professional team indefinitely.

#### 2. Guaranteed Return Mechanism Reduces Market Volatility Concerns

The second advantage is the guaranteed return mechanism.

According to Zhang, even if short-term market fluctuations occur, the labor retirement system includes a return guarantee mechanism based on the two-year time deposit interest rate. Under qualifying conditions, returns will not fall below this guaranteed minimum.

Therefore, workers don’t need to assume their retirement funds will sharply shrink due to short-term stock market swings.

#### 3. Leaving Funds Untouched Serves as Emergency Reserve and Enables Asset Inheritance

The third benefit is treating this retirement fund as an "emergency reserve."

If you don’t urgently need the money, there’s no need to rush to withdraw it. If you later face major medical expenses or other life-changing events, you can apply for withdrawal according to regulations. Moreover, if a worker never uses this account asset during their lifetime, under qualifying conditions, the remaining assets can be legally claimed by dependents, offering a form of asset inheritance.