Q: I'm wondering about taking my retirement pension as a lump sum. My financial planner recommends taking the lump sum instead of a monthly pension payment. I know he will benefit from investing the lump sum, but I'm more concerned about how I will benefit, especially if the market goes south permanently. What is your feeling about lump-sum versus monthly pension payments? I plan to retire in 2012, and the elders in my family have lived past 80. -- C.H., by e-mail

A: A growing body of research suggests that most of us would be better off if our retirement income came from multiple sources -- Social Security, a pension and our personal savings. This, after all, is the traditional three-legged stool that planners have talked about for decades. Own your home or condo debt-free, and your retirement will be still more secure.

Having a pension income will also reduce your level of worry. Imagine the stress of having to make withdrawals from your lump sum over the last 12 months of a declining market! If the withdrawals were high, you could permanently damage your nest egg and run out of money.

So I say take the pension. The only circumstance under which you should NOT take the pension is if you have no personal savings. Then you have to err on the side of flexibility and liquidity, and take the lump sum.

Q: I'm a single, 71-year-old male. I'm still working part time, so my income is sufficient with my Social Security, a small pension and an annuity. However, I may stop working in June 2009. Then my income will not be enough. I will need to supplement it. I'm thinking of rolling over $100,000 from my retirement account with MetLife into an immediate lifetime annuity where payments can be delayed for 13 months. The payment of $838 a month is the best I've found so far. I would still have about $90,000 left in my retirement account.

Is it wise to do so now when I don't need the money, but I may need it in another 10 months? My concern is the state of the market now. Like everyone else's portfolio, my portfolio is decreasing. I'm afraid if I wait too long, I may lose too much money and may not be able to get as good a return in the future. -- B.D., by e-mail

A: Thinking about life and death is never easy. But when we make these kinds of decisions, that is what it is all about. As a 71-year-old man, your life expectancy is 12.8 years -- call it 12 years and 10 months. This doesn't mean you will die then. It only means that half of the men your age will die before then. And half will die later. Your annuity purchase will be a reasonable return investment if you live to expectancy.

When you give your $100,000 to the insurance company, it is betting it can earn more than 4.13 percent on your money for that 12-year, 10-month period. At $838 a month, it will be 10 years before you receive your original payment back. If you die at that time, your return will have been zero. Once you pass 10 years, however, your return on investment starts to climb. It will be 4.13 percent if you live to expectancy. It will rise to 6.38 percent if you live three years beyond expectancy. The longer you live, the better it works out as an investment.

Every month you delay reduces your life expectancy a bit. All other things being equal, that would result in a higher monthly payment. That's why some people buy life annuities in steps, banking on increases as they age. If interest rates decline, however, the insurance company would reduce the benefit to reflect the same. Whether you would gain or lose on balance is a crystal ball issue.

Since you already have lifetime income from Social Security and a pension, you might consider buying a somewhat smaller lifetime annuity and keeping more of your assets invested.