Traditional pensions. Workers who receive traditional pensions can choose to receive their benefits as payments throughout their life. About 32 percent of households had a traditional pension in 2007 with an average pension income of $19,500, according to the IRS.
Pension benefits are insured by the federal government up to certain annual limits, even if the former employer goes out of business.
However, many workers with traditional pensions elect to take their benefits as a lump sum instead of payments throughout their lifetime. When the lump sum option is selected there is not a guarantee that the money will last the rest of your life.
