That is a very good question and great to pre plan for your changing tax situation. You can take either monthly payments or lump sum. With lump sum payments you will need to consider how that will increase taxable income. For example, lets assume pension is your only income for the year and you have a choice of $20K in total monthly payments or $100K lump sum. For each of those situations the amounts disbursed will go towards calculating income for the year. The higher the total amount the higher the tax bracket or it may increase tax bracket to a higher percentage. This will also effect taxable amount of social security benefits as the pension will add total income. Hope this answered your question.
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