No. of Recommendations: 1
I have a lump sum pension still sitting around with my previous employer. I have two options;

1. Move the entire amount over to a RO IRA.
2. Annuitize it.

That's it. Only two options. I have left it there because it is guaranteed to grow at a minimum of 5% a year. I count that as part of my overall bond allocation and a low risk 5% return is a pretty good deal as far as that is concerned (speaking of bonds).

I'd suggest you roll it over to an IRA and sort of build your own annuity, by arranging your portfolio to include equities and fixed income securities to give you an income stream.

Granted, a 5% current income stream is pretty hard to do without eating into principal. (An annuity does this too, based on the actuarial likelihood that their payments to you will end when you die precisely on schedule. But a 4% of principal payout can be kept going just about indefinitely. I've been doing it since I retired. My portfolio is about 70% stocks and 30% fixed income, with the fixed income part including individual "junk" bonds and junk-bond and preferred stock ETFs, as well as some investment grade bonds. And drug, oil, and telecom stocks are all paying pretty good yields these days, as are Canadian bank stocks.

So do it yourself, and keep the flexibility to make changes (tax-free as long as it's in an IRA), and take out more or less as you need it.

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