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Pension Decision: $400k Now or $2,000 a Month? Here's What to Consider

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Summary
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80% Informative

Deciding whether to take a $ 400,000 lump sum or monthly pension benefit of $ 2,000 requires calculating the relative value of each option.

The sooner you can receive the lump sum, the more value it will have since you can invest it over a longer period.

The monthly payment option may be more valuable if you expect to live a long time after you start receiving benefits.

Other factors include inflation, inflation and how prudently you can manage a large sum of money.

SmartAsset ’s free tool matches you with up to three vetted financial advisors who serve your area.

Social Security , part-time work or other income may let you withdraw less from your investment portfolio, giving the lump sum option greater value.

If inflation is high, the monthly payment option could lose significant purchasing power.