No. of Recommendations: 3
I don't know, but I understand the questioning. Now if I could reverse the question, how would you do it (anybody)? How would you take a 450k (approx value) lump sum and invest it in fixed income investments and produce a (relatively safe) 5% return?

They don't. They invest it in stocks, or maybe a stock/bond mixture.

Which was my point - you could do the same thing - invest the lump sum in a stock/bond mixture that would average 6% a year, and come out better than taking the pension payment.

Just seems to me like fixed income options yielding 5% or more really suck right now.

If you would be intent on investing the entire $450k lump sum in fixed income investments, then you probably will be better off taking the pension payment. If you were willing to adjust your total portfolio mixture so that you were maybe 60/40 or 70/30 in stocks/bonds, you could probably do better by taking the lump sum.

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