Research from Legal & General indicates that retirees might exhaust their pension savings prematurely due to taking large cash sums and withdrawing excessive monthly incomes. With a current average life expectancy of 86 in the UK, some could face a financial shortfall of up to nine years. This 'Lottery Effect,' where instant access to substantial funds triggers impulsive spending, leads many to treat their pensions as windfalls rather than planned savings. Such decisions can expose retirees to tax issues, lost benefits, and missed investment opportunities.
Retirees may face empty pension pots a decade early due to impulsive spending and unsustainable monthly withdrawals, risking financial stability in later years.
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