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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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