One in three retirees (34%) who took a lump sum from a defined-contribution retirement plan depleted that money in 5½ years, on average, according to the latest study on lump-sum payouts by MetLife.
In a previous MetLife study on the topic in 2017, only 20% of the retirees who took a lump sum payment ran out of money in 5½ years.
In the latest study, 41% of those who have assets remaining from a lump-sum payout express anxiety about their money running out, the study found.
More than half (57%) of the women surveyed were concerned about depleting their lump sums, compared to 34% of men. "More women also have already depleted their lump sums in retirement, with 43% of women having done so, compared to 29% of men,” MetLife said.
Among those who selected a lump sum at retirement, 79% made at least one major purchase, such as a car, vacation or a home, within the first year of withdrawing the money. That was a significant increase from 2017, when 64% made such a purchase.
Among all lump-sum recipients, 46% expressed at least some regret about withdrawing money from their DC plan.
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