pension options

kareenaJanuary 19, 2011

I apologize for posting this now If this has been discussed in the past. I'm in the middle of trying to decide between my 2 pension options - lump sum or monthly payments. I keep fluctuating from one to another. The annuity does not allow for inflation, so the amt. I get in 2011 is the same as 2022, so the buying potential is much less. But, it is a guaranteed payment. Or I can roll over the lump sum amount and hppefully invest it wisely and conservatively. Has anyone gone through the same madness?

Thank you for reporting this comment. Undo

I would take the payments. If you take a lump sum, you can lose it due to being sued, a spouse taking it or not having the necessary health insurance. This advice was given to a family member and she was never sorry.

I get my husband's pension and social security so I have a good income. He died 4 years ago and inflation has not been a problem and it probably won't me as I am 74.

    Bookmark   January 19, 2011 at 3:26PM
Thank you for reporting this comment. Undo

Take the monthly payments - even if it's a fixed amount forever. There are very, very few good options right now for investing either wisely or conservatively.

Enjoy it on a month to month basis; having extra to spend a bit or save is not a bad thing.

    Bookmark   January 19, 2011 at 6:25PM
Thank you for reporting this comment. Undo

monthly it is a relief to know you can count on that each month even if it is low.

    Bookmark   January 20, 2011 at 11:40AM
Thank you for reporting this comment. Undo

thanks for your responses. Anyone feel otherwise? Funny that most of the men i ask tell me to take the lump sum, whereas the women opt for the payments.

    Bookmark   January 20, 2011 at 2:51PM
Thank you for reporting this comment. Undo

This is a situation that has to fit in with your own personal comfort zone - no two people are alike or regard money in quite the same way. Who knows, maybe a man's first thought is to pay off a mortgage, buy a big boat, a string of polo ponies, or lose it all playing poker at the nearest casino... or just feel "rich" carrying a wad of cash in his wallet.

If the economy were different and there were good, solid (even reasonable) investment opportunities, I might think in terms of a lump sum. There are some stocks paying good dividends (many in the energy sector now, I'm thinking). I like the stock market and continued buying through the downturn but only because I had my pension and other discretionary monies to do it.

    Bookmark   January 20, 2011 at 3:25PM
Thank you for reporting this comment. Undo

I'm going to be in a similar situation. I'm 99% sure I'm going to take the lump and invest it with Vanguard. They have the lowest fees which is absolutely important over the long haul.
Do not let a financial advisor talk you into taking the lump and investing it for you, he is only interested in getting his percentage. They are salesmen! You need to really do your homework if you decide to take the lump. You can do your research online, I'd suggest going to and checking it out. Good Luck!

    Bookmark   January 25, 2011 at 6:56AM
Thank you for reporting this comment. Undo

thanks for all the responses. I finally decided that I'm more comfortable taking the monthly payments. What I've learned in these few weeks is that it really does depend on the individual. What a relief once the decision is made! thanks again.

    Bookmark   January 26, 2011 at 1:25PM
Sign Up to comment
More Discussions
Brains and bodies, like muscles, need exercise
What do they say about muscles - "Use them or...
Elderly mother cancelled her long-term care policy
Apparently, the premiums were increasing significantly...
What's Pretirement mean?
Hi guys. I want to hear your thoughts about this. I...
Rochester NY to North Carolina?
seriously considering move. NY is kind to pensions...
Retiring Abroad: Costs of 12 cities
Does not cover healthcare, which can be complex enough...
© 2015 Houzz Inc. Houzz® The new way to design your home™