Thank you for your question; it is one that a lot of retirees ask and plan around. There are pro’s and con’s on both choices, let’s break some of them down:
Pro Lump Sum, Con Pension
Con Lump Sum, Pro Pension
Ensuring a successful retirement starts with understanding your cash flow needs. We believe that your expenses that are fixed and recurring should be covered by a guaranteed source of income like your pension, social security or annuity payments. Your discretionary costs should be covered by your investments and other income sources and you should have safeguards in place like adequate insurance and emergency savings to keep your cash flow as predictable as possible.
As mentioned above, there are benefits and trade-offs that you need to consider how they impact your personal situation. There are some great resources that can help guide you through some of the decisions that retirees face on www.usaa.com/retirement and we have a team of advisers that are here to help at 800-531-USAA.
I hope that this information has been helpful for you. Please let me know if you have any follow-up questions that I can help navigate as well. Thank you for your membership.
Sean Scaturro, MBA, CFP®