| Payout Options — Investment Plan |
| Lump Sum |
Pros |
Cons |
| You can choose to take a full or partial lump sum distribution of your account balance and have it paid directly to you.
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You have a lump sum cash payment that you can use to pay off debt or make a purchase (be sure to review the Tax Implications).
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- You will be taxed on the money (see Tax Implications for details).
- If you don't carefully budget for the entire length of retirement, you may run out of money.
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| Fixed Annuity |
Pros |
Cons |
| A guaranteed and set monthly payment.
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- Your monthly benefit will always stay the same.
- You can choose to have your annuity paid to you for a specified period or for the rest of your life.
- Payments are not subject to market fluctuations.
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- No choice in how your money is invested.
- You cannot change your payout option once payments begin.
- You must pay the cost of the annuity from your account balance.
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| Variable Annuity |
Pros |
Cons |
| A monthly payment that will vary depending upon the performance of the investment options you choose.
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- You choose the investment funds.
- You will receive a monthly income payment.
- You may receive a higher return than with a fixed annuity.
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- Payments are not guaranteed - they are subject to market fluctuations.
- You are subject to pay investment management fees and other charges.
- You must pay the cost of the annuity from your account balance.
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| Joint and Survivor Annuity |
Pros |
Cons |
| A monthly payment that will provide a continuing benefit (usually ranging from 50-100% of your original benefit) to your spouse or other beneficiary should you die.
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- Allows you to provide a continuing benefit to your spouse or other qualified beneficiary.
- You get to choose the percentage amount of the continuing benefit.
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- If both of you die, there is no continuing payment to another beneficiary.
- Your monthly benefit is reduced slightly so that a continued benefit can be paid to your spouse or other qualified beneficiary.
- You must pay the cost of the annuity from your account balance.
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| Systematic Withdrawals |
Pros |
Cons |
| A flexible payment schedule where you decide how much money to withdraw, and how often.
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- Allows you to get the money you need for your living expenses while still keeping your investment growing.
- You can change the payment amount at any time.
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- Payments are not guaranteed to last your lifetime.
- Your payments are affected by market fluctuations.
- Requires frequent monitoring of your investments - the amount of your withdrawals need to be less than what your investment earnings are to keep pace with inflation.
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| Combination |
Pros |
Cons |
| You can choose to take a partial lump sum payment and have the balance paid as an annuity.
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Refer to the Lump Sum Payment and Annuity options above for information.
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Refer to the Lump Sum Payment and Annuity options above for information.
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| Payout Options — Pension Plan |
| Single Life Annuity |
Pros |
Cons |
| Provides you with the maximum monthly benefit for your lifetime.
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- Provides you with the maximum monthly benefit for which you are eligible.
- Payments are paid to you for your lifetime.
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Does not provide a continuing benefit for your spouse or beneficiary after your death.
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| Reduced Life Annuity |
Pros |
Cons |
- Provides you with a reduced monthly benefit for your lifetime.
- If you die before you receive benefits for 10 years, your beneficiary will receive the same benefit you were receiving until the benefit has been paid for 10 years in total to both of you.
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- Provides a continued benefit to your beneficiary for a set period of time.
- Allows you to choose any beneficiary to receive payment.
- Payments are paid to you for your lifetime.
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If you live longer than 10 years after you begin receiving benefits, upon your death your beneficiary is not entitled to a benefit.
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| Reduced Joint and Survivor Annuity |
Pros |
Cons |
| Provides you with a reduced monthly benefit for your lifetime, with payment of the same monthly benefit to your spouse or joint annuitant (who is financially dependent on you for the remainder of their lifetime).
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- Provides a monthly benefit to your survivor that is equal to what you were receiving.
- Allows you to choose any beneficiary to receive payment.
- Payments are guaranteed for the lifetime of you and your joint annuitant.
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No further benefits are payable after both you and your joint annuitant die.
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| Reduced Annuity with 2/3 Survivor |
Pros |
Cons |
| Provides you with a reduced monthly benefit while both you and your spouse or your joint annuitant (who is financially dependent on you) are alive. When either of you dies, the monthly benefit payable to the survivor is reduced to two-thirds of the monthly benefit.
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- Provides for a larger benefit while both you and your joint annuitant are living, and a smaller benefit when only one of you is living.
- Allows you to choose any beneficiary to receive payment.
- Payments are guaranteed for the lifetime of you and your joint annuitant.
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No further benefits are payable after both you and your joint annuitant die.
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