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Taking the lump sum and rolling it over to your IRA is usually the best deal. While you are at it you might want to sit down and pencil out what your retirement expenses are likely to be and what your income sources are likely to be. That $1900/mo annuity plus Social Security, could sound like a reasonable amount to retire on, but its likely the annuity payment will be fixed for life, and with people living to be 90 or more, inflation can be a large factor.

Your plan will probably show that you need your IRA account to grow at a reasonable rate to provide a decent retirement. Similarly one would hope that you have a defined contribution plan that will help you accumulate some more, but the amount you can accumulate in 10 years might be not much larger than your IRA is now.

From these calculations you should be able to arrive at a good idea of what kind of return you need on your investment to meet your retirement needs. If its reasonable, say 5%, you can be conservative in your investing. If its 10% or so, you probably should go into stocks. Fools would suggest an S&P 500 Index fund as your basic investment. If its much higher than 10%, then you have a problem that needs attention. You need to increase your rate of savings, reduce your retirement costs, or plan on at least a part time job in retirement.

All of this is useful for planning purposes. Fooldom offers an online short course on how to plan for retirement that helps you get all the numbers together. You will also find books in the library on this subject. Brokers, insurance companies and others offer similar planning assistance--though some use them to sell (often expensive) products and services. A financial planner can also be used for this purpose if you find the DIY approach overwhelming.

Best of luck to you.
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