There are 10,000 people who retire every day nationwide. When it comes to pensions, a growing number of them face a dilemma: Whether to take a lump sum or get monthly lifetime payments. What you decide is critical for your financial future.
Cora Adams worked for a phone company for 36 years. She told us: "I went to work every day. I had perfect attendance."
When Adams retired, she had a big chunk of money coming her way - either as a lump sum - or as monthly lifetime pension payments. Adams decided to act on the advice of a girlfriend and take the lump sum. Now, she says she regrets it.
"Don't take the step I took."
That's because almost all of Cora's retirement money is now gone. She spent part of it on her granddaughter.
"Paid her car insurance. Paid her rent," Adams said, adding that she also bought her granddaughter a car."
Cora used a broker to invest $250,000.
"But in three years, I didn't have no money," she told Action News.
"This is not the first case I've seen," said attorney Debra Speyer. "I see this over and over and over again."
Speyer believes a growing number of employers are putting pressure on consumers to make a decision that may not be in their best interests.
"Because more companies are going to want to get out of the pension business - they're going to want to give somebody a lump sum rather than manage their pension," she says.
But Speyer advises retirees who are used to living paycheck to paycheck to take the monthly lifetime payments.
"It's a safe alternative," Speyer says. "You know you'll have food on the table."
Speyer says if you take the lump sum, you have to be extremely disciplined and avoid spending the money on yourself or others. She also warns investing your pension in the stock market or an annuity might be risky. You should talk to a financial expert before making any decisions.
"But you have to be very careful because there are a lot of people out there who will tell you to take that lump sum because they want to make a commission on that product."
That includes annuity companies and stock brokerage firms. Unfortunately, Cora learned that the hard way.
There are, of course, exceptions to Speyer's advice. For instance, a lump sum might make sense for someone who's very sick and has a short life expectancy, or for someone who's very wealthy and doesn't need their pension for everyday living but wants to control their money and leave some behind for future generations.