Liz Weston

Dear Liz: I need advice on choosing between a lump sum retirement benefit and a monthly payout till death (with a cost of living adjustment). The monthly payout option also includes health insurance benefits but the lump sum option does not.

Answer: It’s hard to imagine a better option than a guaranteed, inflation-adjusted stream of income for life — particularly if that option includes retiree health insurance benefits, which are increasingly rare.

If you take the lump sum, you’ll be responsible for investing the money with no guarantees that you’ll get as much as if you’d picked the payment option. A bad market or bad investments could dramatically reduce your nest egg, as could fraud or improvident spending.

Even if you’re a good investor now, there’s no guarantee you’ll remain so. Our financial decision-making abilities tend to decline with age, although our confidence in those abilities often remains high — a truly scary combination.

The devil’s always in the details, though, so take the paperwork describing these options to a fee-only, fiduciary financial planner so you can get customized advice based on your situation.

You can get referrals to fiduciary financial planners from the National Assn. of Personal Financial Advisors, the Alliance of Comprehensive Planners, the Garrett Planning Network and the XY Planning Network. The Garrett network represents advisors willing to charge by the hour; XY Planning Network advisors offer the option of paying a retainer fee.

Be absolutely sure you’re dealing with a fiduciary financial planner — one who agrees, in writing, to put your best interests first.

Most advisors are held to a lower “suitability” standard that allows them to recommend investments and strategies that pay them more, rather than those that may be the best fit for you. An advisor held to this lower standard may urge you to take the lump sum not because it’s in your best interest but because they can earn commissions by selling you various investments.