Richard Paul, CFP®

Novi, Michigan

2026 Edition

A Note Before You Begin

If you're holding this book, you're almost certainly facing one of the most consequential financial decisions of your life: what to do with the pension you've spent a career earning. Take the monthly check? Take the lump sum? Some combination of both? And how do you make that call with confidence when the answer reshapes the next 20, 30, or 40 years of your life?

That's exactly what this book exists to help you figure out.

But before we get started, I owe you a little context about where this book came from — because it'll explain a few things you're going to notice as you read.

A Quick Note About This Book's Origins

For decades, our firm has specialized in helping people navigate exactly this decision. We've spent years sitting across the kitchen table from engineers, managers, nurses, teachers, tradespeople, and executives — walking through pension elections, lump-sum windows, Pension Risk Transfers, and every wrinkle in between.

We first wrote a guide on this subject in 2019. In 2026, we rewrote it from top to bottom to reflect everything that's changed since — and trust me, a lot has changed.

The book you're reading right now is built for anyone, anywhere, facing a pension vs. lump sum decision. Whether you spent your career at a Fortune 500 manufacturer, a hospital system, a utility, a school district, an airline, or a regional employer most people have never heard of — the framework, the math, and the principles in these pages apply to you.

A Note on the Analogies

Because as you read, you're going to notice a few analogies. Maybe more than a few.

A pension compared to a dependable pickup truck. A lump sum compared to a sports car with no GPS. A retirement strategy described as "choosing your ride." Stories about retirees watching their pension obligations get transferred to an insurance company overnight.

We tried to scrub a few of them out in the edit. We failed. Eventually we decided the analogies actually work — a pension really does behave like a workhorse pickup, a lump sum really does drive like a sports car, and frankly, if you can't explain a complex financial decision with an analogy your reader can picture in their driveway, the analogy probably isn't doing its job.

So consider the analogies a feature, not a bug. The decisions don't change whether you're retiring from a manufacturing plant, a Pennsylvania hospital, an Atlanta utility, or a Phoenix school district. Only the logo on your pension statement changes.

Just a Few Things That Are Different Now

For readers familiar with the original edition — or for anyone who's been paying attention to retirement planning over the last several years — here's a short, non-exhaustive list of what's shifted:

The interest rate environment went through the most dramatic cycle in modern history — and pension lump sums went with it

The SECURE Act and SECURE 2.0 rewrote the rules around RMDs, inherited IRAs, Roth accounts, and early retirement distributions

Pension de-risking — corporations transferring pension obligations to insurance companies — went from a notable headline to an industry-wide trend

Inflation went from "barely a concern" to a 40-year high — then back down again

Social Security got its biggest update in years with the Social Security Fairness Act

Every one of these changes gets the full treatment in the chapters ahead.

The Strangest Shift of All

And maybe the strangest shift of all: how people are getting their financial advice in the first place.

Today? Retirees are getting financial guidance from TikTok influencers with millions of followers and zero credentials, YouTube personalities packaging strong opinions as financial planning, and now — most strikingly — AI chatbots like ChatGPT, Claude, and Gemini.

I'll be candid: these tools genuinely are useful. They can summarize the SECURE Act in 30 seconds. They can explain what a 72(t) distribution is. They've raised the floor of basic financial literacy for a lot of people.

What they cannot do — what they may never do — is truly know you. They don't know your spouse's health. They don't know your pension election deadline. They don't know your tax situation, your investor psychology, your sequence-of-returns risk in the first three years of retirement, or what you'll regret in 15 years.

They produce confident-sounding answers regardless of whether they're right, and a confident-sounding answer is exactly what people want to hear when they're staring down the most consequential financial decision of their lives.

If you're using AI or social media to learn, that's a great use of these tools. If you're using them to decide — please, slow down. We talk about this more in Chapter 7.

What This Book Will and Won't Do

This book will:

•Give you a clear framework for thinking through the pension vs. lump sum decision
•Walk you through the six fundamental questions every retiree should answer before electing
•Explain the protections (PBGC, state guaranty associations) and risks behind each option
•Show you the most common mistakes people make — and how to avoid them
•Help you understand when and why to involve a fiduciary advisor in the decision

This book will not:

•Tell you which option to choose. That's not something a book can do honestly.
•Replace personalized advice. A book gives you the framework. A real plan requires real numbers, real circumstances, and a real conversation.
•Pretend there's a universal "right answer." There isn't. There's only the right answer for you.

One Personal Update

I'd be doing readers a disservice if I didn't mention one other change since the original edition: my own.

When the first version of this work came out, I was working full weeks, in the office every day, doing what I'd done for decades. As of this writing, I've taken a step toward my own retirement years — with my two sons and the rest of our team carrying the day-to-day load with the same care and rigor we've always brought to clients.

I'm still involved. I'm still writing. I still meet with longtime clients every now and then. But my hours sure do look different now than they did in 2019.

And let me say this, plainly, to anyone reading this book: retirement is amazing. I'd recommend it.

That doesn't mean it isn't earned, or that the planning doesn't matter — it absolutely does, which is why this book exists in the first place. But after a career spent helping other people navigate this transition, I've now had the privilege of walking through it myself. The decisions feel different from the inside. The relief of having a plan, of knowing the math works, of being free to spend your time with the people you love... it's real.

If anything, my own transition has reinforced the message of this book: get the big decisions right, and the rest of retirement takes care of itself.

A Final Word

The world moves fast. The rules move with it. Even the way people learn about retirement has changed beyond recognition. Our job, and the job of any good fiduciary advisor, is to keep up.

Our underlying belief hasn't changed: anyone facing a pension decision deserves straightforward, accessible, fiduciary-grade guidance through the most consequential financial decision of their career.

Whether your pension came from an automaker, an airline, a hospital, a utility, a government agency, or a company most people have never heard of — the stakes are the same, the framework is the same, and your right to a clear, honest analysis is the same.

So buckle up. (Sorry — old habit.) Let's get into it.

Thank you for reading. Thank you for trusting us with your time. And whether or not you ever decide to call our office, I hope this book gives you the framework — and the confidence — to make this decision well.

— Richard Paul, CFP®