Take a Retirement Annuity or a Lump Sum?

Take a retirement annuity or a lump sum?

Excerpt:

Theoretically, you often can make more money by taking a lump sum and investing it than by accepting the annuity, which offers a lifetime stream of payments. But perhaps you've heard the quote "In theory, theory and practice are the same; in practice, they are not." Anyone who knows much about behavioral finance knows there are many, many ways such a plan can go wrong. You could pick the wrong investments, take too much or too little risk, trade too much or spend too much, and wind up much worse off than if you'd chosen the annuity. You could turn over the investing decisions to a pro, but there's no guarantee that person won't make mistakes. Even if he or she chooses great investments and allocates your assets well, your nest egg could still take a hit from the market. If you were comfortable taking that extra risk to get the extra possible reward of more cash, accepting the lump sum would be the way to go.

Comment: Image source with a related article: Using Annuities to Generate Retirement Income . We've worked through this and decided to take the lump sums. Both of us qualify (we were grand-fathered in to the previous company's retirement plan) and the total amount is not insignificant. The annuity option would provide a greater monthly income but have nothing left for the estate.