Problem: When I retire next year, my company will offer my pension as either a lump sum or annuity. Which should I take?

Solution: Probably the annuity, but do your homework to make sure.

The Financial Planning Association says that the lifetime value of the lump sum payout typically is worth less than the lifetime value of an annuity - sometimes as much as 50 percent less, assuming the worker lives to his or her life expectancy

For years, defined benefit pensions were simply paid out each month based on the worker's age, salary and tenure.

But in the 1990s, employers began offering a lump sum option. According to the Department of Labor, about one in four employers offer a lump sum option.

Lump sums are cheaper for employers to pay out. Plus, experts say, about 90 percent of workers choose the lump sum option.

The U.S. Treasury Department has proposed that employees be given apples-to-apples comparisons of the two options. But those rules won't take effect until next year.

If you're retiring before then, ask your employer for a comparison anyway.

Say, for example, your two choices are $1,400 each month or a lump sum of $150,000. A commercial pension calculator would show that for the average man, the lump sum option would be the equivalent of a monthly annuity payout of $1,058.

Conversely, the $1,400 monthly annuity would be the equivalent of a lump sum worth $198,413.

The numbers obviously work out differently depending on life expectancies, investment returns and planning choices, such as IRA rollovers.

Readers: Consider Savvy Strategies as general information only and seek the help of professionals because circumstances might vary. Planners: Share your unique tips with Enquirer readers. Send your Savvy Strategies to Amy Higgins, 312 Elm St., Cincinnati, OH 45202, or e-mail ahiggins@enquirer.com.