Retirement: Cash Balance Pension Plan - Lump Sum or Monthly Payments?

  • 9th Apr 2026
  • 2 min read

Someone new to this email list took the time to look at the previous notes, then asked if the topic of pension lump sum vs monthly payments ever came up? My answer was that the subject had not come up. The reason was likely because I've been the one doing the sharing, and I was on the old pension plan, which didn't offer a lump sum option.

So here's the question to my "audience" - if you had the option of a pension lump sum instead of monthly payments, what did you choose, and why? I'll collect answers and share them. HOWEVER, I have some rules for the folks who are going to reply:

  1. Tell me if you want your first name in the collection of replies, or want to be anonymous.
  2. Do not share personal financial information. You don't need to share what your lump sum and monthly figures were. Nobody needs to know what you have.

A very small number of people have told me they were on the cash balance plan, and took the lump sum. Nobody has told me they chose monthly payments if the lump sum option was available. My sample size is very small though.

If I had to consider this decision for myself, it would probably boil down the following:

  1. There's some "rule of thumb" math on this. See the videos below. I'd do that math, but it might not be the only deciding factor.
  2. I'd ask myself how much discipline I have not to blow the lump sum on stupid stuff.
  3. I'd ask myself what choice is better for supporting an adult child with a disability.

Wes Moss - Should I Take a Lump Sum or Monthly Pension Payments? | How to Decide

James Conole, CFP - Lump Sum vs Annuity: Which Pension Option Is Better?