<prompt> Human: I switched jobs last summer and was vested in a pension plan at the time of leaving. I received a letter stating that I had the option to receive a lump sum of the benefit now or receive it as an annuity. The value is just shy of 5,500 now. I can do a Straight Life Annuity for 7.60month now, wait until January 1, 2049 and receive 131.67month, or take the lump sum now.My initial thoughts are to take the lump sum now and pay down some debt. I had forgotten about this pension as I was already investing in a 401k through the company, so this money is unaccounted for.What questions do I need to ask myself or do I need to answer? What kind of tax implications can I expect? Smarter to leave it alone or get the lump sum? Any other thoughts, ideas, questions? Thanks.UPDATE: Thanks for the advice. I followed up with the plan administration and it would be 20 off the top and then 10 early penalty. Didnt realize I could roll it over to an IRA until ued_lv mentioned it, but that was confirmed on their end as well. That will be my selection. Thanks again.  <response>: You should take the lump sum and roll it over into an IRA. That way you dont have any tax liability, and would be in control of your money. If you cash it out, you would pay income tax at your marginal rates plus the 10 penalty for early withdrawal. 