Pension payouts: What’s the best option?

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Abstract: One tough decision that retirees face is choosing the best option for receiving payouts from a pension plan. Would a lump-sum payment be the best option, or would it be better to go with an annuity? If the latter, is it better to go with single life or joint life? What about combining a single-life pension payout with a life insurance policy? As this article explains, the answers depend on such factors as the beneficiary’s and spouse’s actuarial life expectancies, current health conditions and family medical histories, along with current financial needs and the possible desire to provide a spouse with a continuing source of current income. A sidebar shows how a breakeven analysis can assist the decision-making process.