If you are receiving a payment from a US qualified pension plan the amount of lump sum offered is governed by law. Even so there are a lot of variables to consider in making the decision. How well you invest, your life expectancy compared to average life expectancy, male or female, whether the plan offers other forms of payment that might better suit your needs (such as a annuity continuing to a partner after your death) or all important factors to consider. Ideally, your neighbor is an actuary who can help you evaluate your options.The lump sum is designed to be equivalent to a monthly pension based on a specified interest rate and mortality table. The mortality table is unisex so it tends to overstate the actuarial value for men and understate the actuarial value for women. If you can invest the lump sum and earn more than the interest rate used to calculate the lump sum, it may be advantageous to take the lump sum and invest it. It can be hard, however, to invest and beat the interest rate without taking risk. Also, if you have a shorter than typical life expectancy, the lump sum could be worthwhile. There are a lot of variables to weigh, not least of which is the comfort one can receive from a payment that will continue as long as you live.Sorry, there is no u201cone size fits allu201d answer.