Around 40,000 GM retirees facing big pension decision - FOX 35 News Orlando

"It's probably a surprise. It was to me, very much a surprise when I got the letter," said GM retiree Bob Black.

He put 40 years into General Motors and now he has only a few weeks to figure out how to divvy up the retirement money owed to him.  Black is leaning towards a lump sum.  Why?

"Just some of the things I've read and I'm a little bit concerned about inflation, and by getting a lump sum, I'm in complete control of my finances."

It's a question 40,000 GM retirees are having to ask -- the lump sum or not.  General Motors took the pension accounts for these retirees and handed them over to Prudential.

"Everybody's just spending the next [several] weeks of their life trying to figure out the most important decision of their life," said Dean Thurmon with Investwise Financial.

He calls it a game of hot potato.

"They decided they didn't want it anymore, so they asked the government ... which means they basically asked themselves since the government is one of the largest shareholders of General Motors, for permission to dump this onto somebody else."

$500,000 is the average amount that a GM employee would get paid out if they went for the lump sum.  If not, they get a few thousand dollars every month.

"There was a catch-all for GM called the Pension Benefit Guarantee Corporation that [would] back up the pensions.  Prudential doesn't have that.  Prudential has the State of Michigan or your own local state that will somehow back up a portion of that pension," Thurmon explained.

250 retirees coming through the InvestWise office with not a lot of time to decide.  Thurmon says many retirees have been doing some fuzzy math.

"They're taking their $500,000 lump sum and dividing it by the $36,000 that they're going to receive per year from General Motors and saying, hey, GM is only expecting me to live another 13 years or something.  They're not considering any of the interest or growth or dividends ... that $500,000 would be earning for the rest of their life."

It's a hard lesson that guys like Black never imagined having to learn.

"I guess I should have paid better attention in economics class," he said.

GM retirees who are being offered this package have until July 20 to make up their minds.