Deciding between a lump sum or monthly pension payments can be complex. A Redditor is weighing a $107k lump sum against $710 per month for life, starting at age 65. Commenters generally favored the lump sum, but warned it may not suit those with less financial security or living longer. Monthly payments provide a safety net and consistent income, especially for essential expenses, while the lump sum allows for immediate investment opportunities which could yield returns over time. Consulting a financial advisor is recommended for personalization of the choice based on individual needs.
Monthly payouts are more beneficial for people who live longer and can quickly burn through the lump sum. If you spend all of the lump sum, you won't have the safety net of monthly payments.
The lump sum gives the Redditor more money right now, and if you put it in a good ETF, it can grow at 5%-10% each year.
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