Thousands of federal workers are expected to retire next month to qualify for lump-sum pension payments that may be eliminated as of Dec. 1.

The payment is equal to about 7 percent of lifetime federal salary. For the typical retiree, that's about $32,000, but in some cases the payment can be almost $100,000.

About 80 percent of all retirees take the lump-sum payment. Some use the money wisely: paying off high-interest consumer loans or investing in high-interest, low-risk instruments. Others don't do as well.

Many retirees ignore the downside of lump-sum payments. Most experts say it is a bad idea to retire just to get the lump sum. Here are some things to consider before opting for the lump sum:

Figure that taxes (state and local) will eat up 30 to 50 percent of the lump sum. If you are under age 55, there will be an additional 10 percent early-retirement surtax for taking the lump sum. You can't defer taxes by rolling the lump sum into an individual retirement account or using 5- or 10-year forward averaging.

The lump sum puts most people in a higher tax bracket. The government withholds only 10 percent for taxes when you get the lump. You must pay the rest at tax time.

If you are retiring, "don't take the lump sum just to have it," says Paul Yurachek, who does retirement seminars for U.S. agencies. "If you aren't a good money manager, if you aren't comfortable investing, leave it with Uncle Sam. Forget about the lump sum. Take the larger, guaranteed lifetime pension," he tells many clients.

Don't retire simply for the lump sum. Each extra year you work boosts your pension about 2 percent. And your high- three-years average salary (used to compute benefits) goes up every year.

"Nobody 'loses' the benefit if they don't take it, then die shortly after retiring," Yurachek says. "Your spouse continues to get a survivor annuity. If he or she dies, your estate gets the balance of your lump sum, less what you and your survivor collected as an annuity."

Taking the lump sum reduces lifetime annuity 5 to 20 percent or more. Not taking it means you get a higher pension, which makes annual cost-of-living adjustments even more valuable.

Tomorrow at noon on WNTR radio (1050 AM), Yurachek will answer listener calls on the lump-sum payment and will tell who should take the option.

King's Fan Club

I goofed in yesterday's item, which said that the Social Security Administraton's Gwendolyn S. King has had trouble with employee unions over automation and job cutbacks. I had the wrong commissioner!

As several readers noted, King has enjoyed excellent relations with unions since taking over from Dorcas Hardy, who tangled with unions over plans to automate operations. King has had much smoother sailing.

In fact, the American Federation of Government Employees union sent a rare message to its own membership by making King an honorary shop steward. She's on the White House A-list for promotion when a bigger federal job opens up.