How to Withdraw Your Pension Money -- and Not Go Broke

When you retire, the last thing you want is to run out of money. But with a little planning, you should be able to withdraw a comfortable wad of cash to live on each year.

A majority of retirees choose to receive their retirement benefits in one lump sum, typically rolling over their investments into IRAs. There are a couple of advantages to this. First, taking a lump sum allows more investment options, because you're no longer limited to offerings in your 401(k).

Second, if you want to leave money to beneficiaries, IRAs give you more flexibility than 401(k)s. Unlike a 401(k), an IRA has a "stretch-out" feature that allows your heirs to make minimal withdrawals from an inherited retirement account.

Tax-wise, it doesn't matter much whether you leave your money in a 401(k) or roll it into an IRA. Both options allow the money to grow tax-deferred. And in both cases you'll pay ordinary income tax on what you withdraw. ...