I know two people who have retired as teachers and withdrawn a lump-sum. One of them has been ok with that decison--the last time I talked with the other (which was several years ago now) she was not that happy.
One friend retired about five years ago -- her husband had died in Jan. of that year--and the SS loophole provision for spousal portions was closing. She retired to work the loophole and maximize her SS widow's portion. She withdrew about 100K as a lump sum that she could invest and later in good conscience leave totally to her daugher vs other parts of her estate that probably in part will be split between her daughter and her step-children from her deceased husband's first marriage--which is how the will they wrote worked. She worked as a substitute more than half the teaching days the first couple of years after she retired. Plus, she had income from her husband's pension, her teacher's pension, and (a couple of year's after she retired) from her SS widow's pension--which comes sooner than her own full SS pension. That pension will be significantly reduced due to her teacher retirement annuity.
Another friend retired almost 7 years before--again a full retirement. She took a larger lump sum to invest because she wanted it as part of her residual estate and because she thought at the time she would not need the full amount of her teacher's annuity. She worked the loop-hole provision so that when she was old enough to draw spousal SS she would draw the full amount without an off-set. She also was able to be rehired by her district and work in an admin capacity--although that income for a time was subject to reduction by TSTA--not sure about now. She told me a couple of years after she retired that she regretted taking out the money and reducing her monthly check. Her husband's income had dried up, and she had not received the kind of return on the lump-sum investment as she throught she would. Having the larger monthly teacher's pension would have been better--but that was hindsight--and by now she may have changed her mind again and be in better shape financially so that she does not regret taking the lump-sum.
Don't know if you know or have considered that one of your options is to make one of your family the beneficiary on your annutity and guarantee a certain payout to that person if you die within a specific time span--even a life time payout. That length would significantly reduce the amount of your monthly annuity, but maybe a shorter time frame might be something to consider. I found the people I talked with at TSTA about MY retirement were more helpful and knowledgeable than my district's personnel office who were no help at all. I received a good suggestion about buying an extra 3 years of work credit toward retirement which made a BIG increase in my monthly annuity.
I would just say that you have to consider your future under a variety of what-if's, but once you make the decision you can't worry about what-might-have-beens...Enjoy your retirement. I certainly have.
