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I have to make a decision in the next year or so as to whether or not to take my pension as a lump sum or annuitized monthly payments, and I am trying to look at all angles.

I know how to compare these two options using standard future value calculations, and I understand the risks of inflation reducing the buying power of monthly payments over time, but one thing I've never seen discussed is the effect of taking the monthly payments on your overall financial liability.

If you take a lump sum, you now have that amount of money exposed to liability. However, if you take the monthly payments, will that reduce the amount a lawsuit could take from you?

Also, in the event of a catastrophic illness, to qualify for medicaid, you have to run your savings down to almost nothing. Do they consider a pension income stream when making these calculations? Ie, if you took your pension as monthly income as opposed to the lump sum, could you qualify for medicaid sooner?

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