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Retirees Depleting Retirement Plan Lump Sums Faster than Five Years Ago

MetLife’s Second Paycheck or Pot of Gold Study℠ Reveals 34% of Retirement Plan Participants, Who Took a Lump Sum, Depleted It in 5 years, on Average

When approaching retirement, employees are faced with a decision that can have lifelong implications: take a lump sum payment or a guaranteed monthly annuity from their employer-sponsored defined contribution (DC) plan. According to MetLife’s 2022 Paycheck or Pot of Gold Study℠, a growing proportion of retirees are depleting their lump sums at faster rates than previously seen. The full report is available at

Today, one in three retirees (34%) who took a lump sum from their DC plan, depleted the lump sum in 5 years, on average. In 2017, the inaugural Paycheck or Pot of Gold Study found that one in five retirees (20%) who took a lump sum from a retirement plan depleted their lump sum, on average, in 5½ years.

“There can be significant drawbacks for retirees when taking a lump sum,” said Melissa Moore, senior vice president and head of Annuities at MetLife. “With the average American living 20 years or more in retirement, longer than previous generations, this can leave them at risk of depleting their money too quickly and needing to fund a significant portion of their retirement years with no income other than Social Security.”

A cloud of concern also hangs over those individuals who still have assets remaining. The Study found 41% express anxiety about their money running out. This is especially true for women, with over half (57%) concerned about depleting their lump sums, compared to a third (34%) of men. More women have also already depleted their lump sums in retirement, with 43% of women having done so, compared to 29% of men.

Spending Habits

For those who selected a lump sum at retirement, more than three-quarters (79%) made at least one major purchase, including luxury items such as vehicles, vacations, and new or second homes, within the first year of withdrawing money. This is a significant increase from 2017, when 64% made such a purchase. Among all lump sum recipients, just under half (46%) express at least some regret about withdrawing money from their DC plan.

In comparison, nearly all annuity-only retirees (97%) use their DC plan money for some type of ongoing expense, such as day-to-day living expenses or housing expenses, and 94% agree that receiving annuity payments makes it easier for them to pay for basic necessities. With that, 95% say that receiving monthly annuity payments makes them feel financially secure. In fact, virtually all annuity-only recipients are happy (96%) that they chose to receive a retirement paycheck from their DC plan.

Pre-retirees Prefer a Guaranteed Retirement “Paycheck”

“Most retirees didn’t have the option of taking a partial lump sum/partial annuity,” added Roberta Rafaloff, vice president, Institutional Income Annuities, MetLife. “Looking ahead, as employers feel more comfortable offering income annuities to retiring workers following the annuity selection guidance included in the SECURE Act, pre-retirees may have more options to make their money last.”

That’s good news since nine in 10 pre-retirees (90%) feel it’s valuable (i.e., very important or absolutely essential) for someone to have a guaranteed monthly income in retirement (i.e., a retirement “paycheck”) to pay their bills. Nine in 10 pre-retirees (89%) also say they are interested in an option that would allow them to have both a monthly retirement “paycheck” that would last as long as they (or their spouse/partner) live and access to a lump sum of their retirement savings to spend however they want. However, if they had to choose one or the other, pre-retirees are far more likely to opt for the annuity (monthly retirement “paycheck”) (82%) over a lump sum that would give them all of their retirement savings at one time but could potentially run out (18%).

About the Study

This survey was conducted online within the U.S. by The Harris Poll on behalf of MetLife between November 16 and December 15, 2021 among 1,911 U.S. adults between the ages of 50-75 who were either retired or within five years of retiring. The study included 907 “retirees” who were defined as adults who are retired and had a balance of $25,000 or more in a defined contribution (DC) plan (e.g., 401(k), 403(b), 457, Thrift Savings Plan) when they retired and withdrew all or a portion of that balance or receive monthly annuity payments of $500 or more from a DC plan. This summary includes notable comparisons to the 2017 Paycheck or Pot of Gold Study when looking at the retiree segment.

The study also included 1,004 pre-retirees, who were defined as adults who are planning to retire within five years but are currently employed full-time, currently enrolled in an employer’s defined contribution plan, and know what type of defined contribution plan they have through their employer.

Data for retirees and pre-retirees were weighted separately on education, age, gender, race/ethnicity, region, household income, household size, and marital status, where necessary, to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

About The Harris Poll

The Harris Poll is one of the longest-running surveys in the U.S., tracking public opinion and social sentiment since 1963. Harris is a global consulting and market research firm that delivers social intelligence for transformational times, working with clients in building corporate reputation, brand strategy and performance tracking, and earning organic media through public relations research. Its mission is to provide insights and advisory to help leaders make the best decisions possible. Learn more by visiting and follow on Twitter and LinkedIn.

About MetLife

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help individual and institutional customers build a more confident future. Founded in 1868, MetLife has operations in more than 40 markets globally and holds leading positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit


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