Originally Posted by calichica
Would there be a benefit or should I just roll into a traditional so I can move to a roth in the future?
$18,500 balance lump sum
Or $78 monthly or $77 spousal benefit.
If the rep was correct, and you interpreted what they said correctly (about being able to have the pension start paying out immediately for the rest of your life at $78/month), the approximate 'return' on this is 4.99%.
So you have to ask yourself if you would want to buy a 100 year bond with a 4.99% coupon rate given today's and future expectations.
Personally, I would roll it over into an IRA to self-direct it, since I would expect a little more growth than 5% long-term. Even if you wanted to allocate the $18k into fixed income, because many feel long-term rates will eventually be getting back (well) above 5% at some point, it would make sense to simply put it in an alternative investment for the time being until rates climb back up, at which point you could buy a 30 year bond if you really wanted to.
I'm big on international diversification, so I would put about 50%+ into foreign funds - but that's just me.