What are the advantages of taking a lump sum?

You no longer have to worry about your company's health: First of all, you lower the risk of losing money if your employer hits dire financial straits. If you choose monthly payments and then your employer goes belly up, you could be in trouble. That's because even if your company is protected by the Pension Benefits Guarantee Corp., the PBGC does not guarantee it will cover 100% of the money you were told you'd get. Consult the PBGC Web site for details on coverage and the maximums it will pay.

You gain control of the investments: If you're an experienced investor and/or a control freak, you'll probably be happier with a lump sum. You'll be in the driver's seat. You can roll the money into an IRA and invest it however you like. If you manage the money well, you should be able to turn it into a stream of income that will stand up to inflation and last for life.

You can leave the money to your heirs: If you manage to invest your money wisely, who knows, there might even be some left over for your no-doubt deserving heirs.

Of course, pulling all this off requires good planning and investing chops. So you have to decide if you're up to it, or if you are up to finding an adviser who can handle the job for you. (Yes, you'll have to pay for the professional advice.)