Using Schwab’s pension calculator, you would need to invest your $150,000 at a 7.03% rate of return just to match the income of your $1,200 monthly payments over your life expectancy.

Here’s a look at how pension income will be treated at tax time.

A pension beneficiary who is offered $250,000 in a single payment in lieu of $2,750 monthly payments for life can start by calculating the potential cumulative value of the monthly payments.