by Suzanne Woolley, bloomberg.com,
October 22, 2015,
It’s like the famous marshmallow tests done at Stanford University decades ago, when researchers gave some kids marshmallows and told them if they waited 15 minutes to eat them they’d get a second one.1 The kids who delayed gratification went on to have better lives, judged by a variety of measures, than the kids who didn’t.
When it comes to your pension, you are the kid. The marshmallow is a big chunk of money.
The test: Within 30 to 90 days, choose to take your pension all at once, as a lump sum based on the present value of your future pension benefit, or wait and have the money trickle in on a monthly basis over the course of your retirement.
If you’re lucky enough to have been in a traditional, defined-benefit pension plan at some point, it’s a choice you may have to make in the next couple of months.