This is Edelman Financial Engine's everyday wealth, with award-winning journalist Soledad O'Brien,

personal finance expert Jean Chatsky,

and Edelman Financial Engine's wealth planner Rose Nyeung.

Walk us through.

How exactly does time and sort of where interest rates are play into making the decision

the right way, Rose? Because your lumpsome payment for your pension is determined by current interest rates.

So that's why interest rates pay such a big role in how much you get from your pension.

Similar to when they list the jackpot of a lottery and say it's a

billion dollars the winner doesn't actually get a billion dollars when they take

the lump sum because that is what the total future payments

would have been if they got it let's say on a monthly basis. So the lump

sum is the present value of those future payments based on a set interest rate.

So if you're one of those people, if you're one of the 20% of people who have a pension,

when interest rates go up, is that a good thing for your lump sum or is it a bad thing for your lump sum? Can you explain the correlation?

Because the lump sum is the current value of what your future payments would have been,

the higher the interest rate, the lower your lump sum.

The idea behind this is that you will be able to take a lump sum chunk of money, invested and have an opportunity

for it to be somewhat equal to what you would have gotten if you let's say took that pension on a monthly basis.

So they're a little like the calculations on a mortgage.

Exactly. They are a little bit like a calculation on a mortgage.

So if you have a mortgage, the higher the

interest rate, the higher your payments. The pension payments aren't

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