mary w has some good questions. Sometimes you can select between various monthly payments that provide various levels of survivor payouts. For example, it might be $2820 for just your Mom, or $2500 for your mom and $1250 for your Dad after she dies, or maybe $1700 until they both die. I made those numbers up, but you get the idea. You should find out if these options or others are available.

Here's my take:

Using Social Security's actuarial tables, she has a life expectancy of 22.65 years, and assuming a 6% real return, the

present value of the monthly payments is $413304, a good bit less than the lump sum payment.

That 6% is the "discount rate," or the amount you'd expect to get if you invested the monthly payments. It accounts for the fact that choosing the monthly payments means that you miss out on the investment gains you'd have if you took the lump sum instead.

A more conservative estimate of the discount rate might be appropriate given that she'd almost certainly be focused on income generation with a relatively low-risk portfolio at her age and current market conditions. Here's the present value at a few other discount rates:

6%: 452658

5%: 498011

4%: 550508

They usually do a pretty good job of matching present value of monthly payments to the lump sum, but it's never perfect because we're just guessing about future returns.

Most importantly, this is assuming that there is no inflation/COL rider on the monthly payments. If there is, then the monthly payments are almost certainly the better choice.

Other things to think about: How much are your parents expecting from Social Security? If they have a hefty amount of fixed income coming from SS, then they may be willing to take on more risk in their portfolio, which potentially increases their discount rate and tilts the choice towards the lump sum payment. On the other hand, if they have trouble controlling their spending then a fixed monthly payment is a good way to keep that under control and make sure that they

*can't* spend it all.

Given that they have even more money available in the 401(k) and brokerage account, they'll probably be fine either way.