Updated July 31, 2026. Quick answer: a pension election is usually irreversible and is made once, under a deadline, on a form that explains none of the tradeoffs. Two choices carry almost all the value. The first is lump sum versus income: the lump sum is calculated using interest rates, so the same pension is worth visibly different amounts in different years, and rolling it to an IRA can close the age-55 penalty exception you would otherwise have had. The second is single life versus joint and survivor, which is a decision about your spouse’s income after you die and is where the largest regret concentrates. Annuities you already own are a separate problem: getting out of one without triggering tax is possible, and the rules reward reading them first.
The lump sum decision
- The 20 Percent Held Back From a Pension Lump Sum Is Avoidable in One Step
- Your Plan May Be Barred From Paying You a Lump Sum
- Why Your Pension Lump Sum Moved When Rates Did
- You Cannot Roll Over a Monthly Pension, and That Is the Door That Closes
- Your Employer Offered a Pension Buyout: the Six Questions That Decide It
- The Age-55 Exception Dies the Moment You Roll the Money to an IRA
- The Pension Break-Even, Computed From the Two Numbers You Already Have
Survivor options and what a spouse keeps
- Single Life or Joint and Survivor: You Are Buying Insurance on the Second Death
- Spousal Consent to Waive a Survivor Annuity Takes Three Things, Not One
Getting out of an annuity
- You Can Leave the Contract Without Leaving the Tax Deferral
- Pledging an Annuity Is Taxable Before Any Money Moves
- A 1035 Exchange Is a Tax Rule, and the Surrender Charge Is Not a Tax
- Money Comes Out of an Annuity Gain First, Basis Last
- The Annuity Penalty Is Not the Retirement-Account One
Other pension and annuity questions
- An Annuity Owned by a Trust May Stop Being an Annuity for Tax
- The Annuity You Already Own: Keep It, Change It, or Get Out
- The Clock Starts When the Owner Dies, Not the Annuitant
- What PBGC Guarantees If Your Pension Fails, and When the Cap Actually Binds
Related guides
Equity Compensation · Trusts · Roth Conversions · Settling an Estate · Inherited IRA Rules · Business Owner Retirement and Exit · Social Security Timing · Retirement Withdrawals · When a Spouse Dies · Charitable Giving and Tax · Divorce and Your Money · Home Sale Taxes · Life Insurance Decisions · IRMAA · Long-Term Care Planning · Research · All guides
A pension election is made once, and it is usually irreversible.
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