What is "lump sum"

Lump \Lump\ (l[u^]mp), n. [Cf. OD. lompe piece, mass. Cf. Lunch.]

1. A small mass of matter of irregular shape; an irregular or shapeless mass; as, a lump of coal; a lump of iron ore. `` A lump of cheese.''
   --Piers Plowman. `` This lump of clay.''
   --Shak.

2. A mass or aggregation of things.

3. (Firearms) A projection beneath the breech end of a gun barrel. In the lump, In a lump, the whole together; in gross. They may buy them in the lump. --Addison. Lump coal, coal in large lumps; -- the largest size brought from the mine. Lump sum,

   1. a gross sum without a specification of items; as, to award a lump sum in satisfaction of all claims and damages.

   2. a single sum paid once in satisfaction of a claim, as contrasted with the alternate choice of several payments over a period of time; -- sometimes allowed, e.g., as an alternative to periodical pension payments for a lifetime.

n. A relatively large single payment of money often paid and received instead of, or in addition to, a sequence of smaller payments.

n. a complete payment consisting of a single sum of money

A lump sum is a single payment of money, as opposed to a series of payments made over time (such as an annuity).

The United States Department of Housing and Urban Development distinguishes between " price analysis" and " cost analysis" 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 of the American Federation of Labor 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 reported in July 2011 that research by Prudential had found that 79% of polled pensioners collecting a company or private pension that year took a lump sum at their retirement, 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."