Though some retirees can become wealthier by investing a tax-free lump sum
Weigh up the pros and cons before making a decision. Illustration: Getty
When approaching retirement, thousands of Irish workers a year face a critical decision that could significantly impact their financial security for the rest of their lives – follow the pensions industry’s conventional wisdom and opt for a 25pc tax-free lump sum from their pension, or leave almost the entire amount invested.
This dilemma deserves careful consideration, as some pension holders – especially those who don’t need a lump sum and have substantial pension pots – might be better off leaving their pension intact if they want to enjoy greater long-term wealth, according to historical analysis we carried out.