Should You Take a Lump Sum? Business Week (07/29/02) p.98; Block, Sandra
Retirees have many options when they leave their jobs; they can take a lump sum from their 401(k) or cash-balance plan, roll it over into an IRA, or purchase an annuity from an insurer. IRAs offer flexibility during emergencies while still allowing investments to grow, but annuities provide guaranteed monthly payments. However, each has drawbacks, and depending on the retiree's life expectancy, one is better than the other. For example, if an investor dies soon after purchasing an annuity, the insurer benefits and the survivors and heirs lose, according to this article.