a. This is a tax matter. Tell us about the taxation of the lump sum.
b. The trouble with lifetime annuity payments: if you need to go on Title 19 (in your late 80’s for example), the annuity income is lost ... if you do not have a spouse. So, a fixed term annuity with larger payments is often a better choice.
c. Long-term care planning is what is crucial. How does this fit in with your plan.
I am told there is a 10% penalty and additional withholding tax if I don’t roll the lump sum immediately into an IRA or 401k, etc. The funds would sit there until I am almost 60. So any more aggressive investments, if I commenced them immediately, would have to make back up that lost ground.
As for long term care, I plan on being perfectly healthy indefinitely. :) But you raise a good point. If it came down to death panels, I have already outlived many of my betters, and would only want to hang around to help my wife and children as long as possible. I am honestly not sure what that means in terms of Title XIX. My hope would be I go till I drop outright and not make any use of it.