2. Lump Sum versus Annuity Payout: Howard, the CEO of a company, has just successfully sold his company to a competitor and now has a decision to make regarding his retirement plan (as there is no position for him in the successor company). Being 55 he is immediately eligible for an early retirement pension, and can begin receiving monthly annuity payments for life equal to about $2,550 per month. A second choice is to receive an immediate, single lump-sum payment equal to about $465,000, which can then be rolled into a personal IRA. His third alternative is to defer receiving his pension benefit until age 65 in which he would receive a monthly annuity equal to about $5,000 for life. The retirement plan discounts its benefits at 5 percent, and according to the Internal Revenue Service, the life expectancy for a 55 year-old is 28 years and 7 months, and the life expectancy for a 65 year-old is 20 years. Howard is your client and has called you seeking advice (forget tax or legal implications for the moment). What do you recommend, and why?