I took the lump-sum but had the proceeds sent directly to Fidelity to establish a rollover IRA. I now draw 72(t) or Substantially Equal Periodic Payments from that IRA. The payments are roughly equivalent to what I would have received as a pension.I have to manage the investments myself. About 70% is in corporate bonds and other income-producing assets. It's a lot of work. My plan is to grow the balance of the IRA by ~2%/year above the rate at which I'm withdrawing funds. In about 10 years, I'll be 59 1/2. At that time, I will no longer be constrained by the SEPP rules and I can change the payment amount coming from the IRA. If my investment plan has been successful at growing the balance of the IRA, I will be able to give myself a cost of living raise. Every five years thereafter, I should be able to increase the payment. It may not keep pace with inflation, but it will help.I have taken on some risk with this strategy. However, the worst case scenario is that I have to slightly decrease the payment to myself at age 59 1/2 to make up for market losses. The upside potential, and probability, is much larger.
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