There are benefits to both a monthly annuity or a lump sum. Lets walk you through a few benefits and drawbacks to each option to help you make the best decision when you decide to retire. A monthly annuity is a sum of money that gets deposited in your bank account each month. People like this because it’s guaranteed income (though much smaller amount) that helps you not worry about running out of money for the rest of your life. The biggest drawback is that you won’t have a bunch of money to put into a different investment that requires a lot of money. A fixed lump sum is a great option if you’re wanting to make a large purchase like real estate or something similar, starting a business or if you’re wanting to invest the money yourself into the stock market. You could potentially gain a lot of money but do risk losing a large amount. Taxes can also be a negative factor when pulling out large sums of money from your annuity.