Do you ever think about your plans for retirement? Will it be a lump sum amount or a pension annuity? What is the actual difference between the two? What are pros and cons of these? We want to provide you with some answers to these questions.

Annuity

In this type of plan you get money each month during your retirement. This would be a regular feature during the rest of your life. Social Security is also a form of annuity and falls in this category as well. If you are lucky and win a lottery jackpot, you get a chance to take the entire amount now or later as payments. Same is the situation with your retirement amount.

Taking the money

Just imagine-it is same situation here. You have options of taking home a lump sum amount or payments. You are aware that you get more money if you agree to take payments. This would be true if you live a long life. However longevity is not an everybody's game. Some persons may survive longer and some may not.

There are some situations where if you take money then it would turn out to be a sound decision. Will you like a nice check of security each month? A lump sum could be thousand of dollars and you can do lot of things with that money. You can repay your mortgage. You can start a business, etc.

Taking the payments

You may not be getting a good check of Social Security. Then your retirement income would be your major source of funds. In that condition you can decide to take payments on monthly basis. You may get more money, if you live for a longer duration. This would also eradicate any unfruitful investments or mistakes.

Summary

Which type of plans for retirement you have in your mind? You may surely be faced with a decision. Should you go for lump sum payment or annuity pension? Just sit calmly and take into consideration all the possibilities. What way you go will be a simple gamble. Try to proceed with good odds.