At the beginning of the summer, at age 65, a friend was laid off from her job at a major corporation. She wisely sought the advice of a financial planner, but she’s still worried about making the wrong choices.

She wanted help in reviewing her options. If she makes the wrong decision — or panics, as many investors have done since the debt-ceiling deal was announced — she could run out of money.

As we talked, she was struggling to answer my questions, shuffling papers and getting increasingly frustrated. She’s better off than many people forced into retirement. At least she has a pension. And yet, near the end of our conversation, she was in tears.

“I should have done more,” she said, her voice quivering. “I just didn’t know. I just didn’t know.”

She shouldn’t feel guilty. She did the best she could with the information she had. If you’re in the pre-retirement phase of your life or you’ve been pushed into retirement because of a job loss, you’re going to face a blizzard of choices. And what a time to have to face them.

Here are just a few of the issues my friend, who asked that her name not be used, was weighing as the stock market was diving up and down last week.

● Should she take a lump sum from her pension or opt for monthly annuity payments that continue until she dies. She’s not married, so she doesn’t have to worry about options that would affect a spouse. (AARP has a calculator that is useful for spouses to evaluate pension options. Go to and search for “Pension Plan Retirement Options.”) If she takes the lump sum, she controls the money. If she invests it, and all goes as planned, she could generate the same amount, if not more income, than the annuity would have provided.

But that’s a big if. Is she capable, on her own or with the help of a financial adviser, to take on the investment risk herself? Would she panic in the future when the Dow fluctuates wildly?

On the other hand, the annuity payment is a guaranteed monthly stream of income. What if her former company goes out of business? She didn’t know that the Pension Benefit Guaranty Corporation (, a federal agency, is responsible for paying the benefits of failed pension plans. Its operations are financed by insurance premiums and with assets and recoveries from failed plans. The maximum payment for plans that are taken over this year is $4,500 a month for someone age 65. Her annuity payment is well below that amount.

● She’s got to decide whether she wants to keep her 401(k) where it is or roll it over to an IRA. If she does the rollover, she’ll have to decide how to invest this money, too.

● How aggressive should she be in her investment choices? The returns have to be enough to stay ahead of inflation. At 65, she still could have 20 years or longer to live off that money.

● Should she take Social Security now or wait until her full retirement age at 66? Can she afford to wait and collect at 70, when her benefit will be larger? She could live past the break-even point, at which time her waiting to collect a bigger check would pay off. AARP also has a Social Security benefits calculator to help with this decision.

● She’s already signed up for Medicare, which is important to do when you turn 65. Otherwise, you could face higher premiums. She’s got to run the numbers to see whether she can afford long-term care insurance. Medicare does not cover long-term care.

● Should she take some of her retirement money and pay off the mortgage on her condo, which she refinanced only a few years ago? I think she shouldn’t take this option off the table. It would take about half of what she has saved to pay off her mortgage. However, it will get rid of her largest monthly financial obligation.

My friend has to gather more information before she can fully evaluate her choices. My questions made her realize that she had to do more research. Even with the assistance of a financial planner, she’ll need to have a good understanding of her options.

“It just shouldn’t be this difficult,” she said. “It’s a sin and a shame, as the old folks used to say.”

Yes, it is. Retiring has become too complicated. People are expected to do calculations that include making guesses that would make anybody cry.

Readers can write to Michelle Singletary c/o The Washington Post, 1150 15th St. NW, Washington, D.C. 20071. Or e-mail: Personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.