I am the beneficiary of what was left in my mom's state pension fund. I don't know how much it is, but the state estimates most people run through their pension funds (when they chose that option) in 10-12 years. She had been retired not quite 9 years.
If I take it in cash, 20 percent is deducted for federal taxes. However, she also left me a house with a mortgage ($119,000 at 3.875%) and a second ($39.000 at 7.875%). Unfortunately, I don't know how much is in the fund and when I called CalPERS, they couldn't or wouldn't tell me. However, it's possible there is enough to pay off at least one of the mortgages. I believe the 20 percent for federal taxes would be more than offset by what I would save in paying interest. As I intend to live in the house, it would also cut my mortgage payment.
On the face of it, this seems like the most prudent course, but I am not an expert in finances. Is there anything in this equation I'm not accounting for? Would rolling the funds into an IRA be wiser?