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No. of Recommendations: 2
This is the same dilemma that Social Security and lottery winners face. Your payments are based on an actuarial prediction of what your lump sum amount would be worth over time. The longer you wait to claim it, the longer the principal has to grow and thus the larger payments.

If you think you could grow the money better on your own, consider the lump sum. You can usually have the money placed into a rollover Traditional IRA so you can avoid income taxes and penalties. On the other hand, if you don't need the money and trust the company to not raid the pension fund for executive bonuses, the full monthly benefit could be a better deal, especially if you are in good health and will live many years past 65.

Who recommends considering your pension options in the overall context of your full retirement portfolio...
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