American workers have steadily built up 401(k) balances, but new research suggests they remain poorly prepared to spend down those savings once paychecks stop.
Three studies published in June 2026 by the TIAA Institute/Nuveen, Corebridge Financial, and Vanguard all converge on the same problem.
The retirement system has succeeded on the accumulation side, with $8 trillion in assets spread across 725,000 plans serving 80 million workers, according to Nuveen.
Workers know how to contribute, pick funds, and stay the course through bear markets, but when paychecks stop and withdrawals start, that knowledge runs out.
The gap between accumulation and decumulation represents a significant planning shortfall, and research suggests most workers are not prepared for it.
Most 401(k) participants have barely planned for withdrawals
The TIAA Institute and Nuveen surveyed more than 2,100 employees across all career stages for their 2025 Participant Sentiment Survey on Lifetime Income.
Among the full sample, only 22% said they had given serious thought to how they would draw down their retirement accounts, the study found.
Even among late-career participants who expect their 401(k) to serve as their primary retirement income source, just 26% reported meaningful withdrawal planning, the firms reported.
Margie Glenn, a certified financial planner and certified public accountant at Moneta, told Yahoo Finance that retirees without a formal distribution plan risk burning through savings too fast or holding back too much.
Without a formal distribution plan, you are flying blind…You risk either overspending early and jeopardizing your long-term security, or fearfully underspending and failing to enjoy the retirement you sacrificed a lifetime to build
Knowledge gaps compound the preparation problem, with participants answering only 32% of the survey’s 15 retirement fluency questions correctly and nearly half failing to correctly answer a single question about the mechanics of making retirement plan withdrawals, the study showed.
“You can’t solve for income that lasts a lifetime if you don’t understand how long that lifetime might be,” Surya Kolluri, head of TIAA Institute, noted.
Corebridge finds most pre-retirees uncomfortable drawing down balances
A Corebridge Financial study reinforces how deeply the accumulation mindset has taken hold among Americans approaching and entering retirement.
The firm’s Decumulation Planning Gap Study, conducted by Greenwald Research, surveyed 2,210 adults aged 45 to 79 with at least $100,000 in investable assets.
While 61% described retirement as a time meant for enjoyment, 50% said they feel uncertain about spending down their savings, Corebridge reported.
Only 28% expressed comfort with watching their balances decline to cover everyday living expenses, and 70% said preserving the size of their nest egg was “very important,” according to the Corebridge data.
That fear of depletion translates into a planning vacuum, with just 14% of retirees reporting a detailed strategy for managing required minimum distributions and only 29% of pre-retirees aged 55 and older having organized any withdrawal plan, Corebridge’s findings showed.
“Retirement is meant to be enjoyed, but many find it difficult to give themselves permission to spend the savings they’ve worked so hard to build,” Terri Fiedler, president of Retirement Services at Corebridge Financial, said.
Vanguard argues that sustainable income matters more than account balances
In a research paper published in early June 2026 titled “Principles for Retirement Income,” Vanguard introduced a framework that shifts the retirement conversation away from savings targets and toward reliable income generation.
The firm argues that two investors with identical savings can have vastly different outcomes depending on their withdrawal strategies.
Vanguard’s framework recommends separating essential costs from discretionary spending and pairing guaranteed income sources with flexible portfolio withdrawals, as outlined in the paper.
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“The last day of work is a milestone, but retirement is a long journey shaped by decisions that evolve over time,” Garrett Harbron, Vanguard head of advised wealth management strategies, said.
The research illustrates the stakes with a simple model that shows how dramatically withdrawal rates can change outcomes.
A $500,000 portfolio earning 5% annual returns would grow to roughly $843,000 over 30 years at a 3% withdrawal rate, but at 5%, that same portfolio would run dry before reaching the 30-year mark, Vanguard’s modeling showed.
A financial advisor warns that the 4% rule is only a starting point
One commonly cited guideline suggests withdrawing 4% of total retirement savings in the first year and adjusting for inflation each year after that.
A revised version, updated from the original framework first published in the 1990s, raises the sustainable starting rate to 4.7% for diversified portfolios.
“The go-to number most people rely on is the 4% rule, but that should be treated more like a guideline and not an autopilot system,” Evan Mills, an associate financial advisor at Scholar Financial Advising in Winston-Salem, N.C., told Yahoo Finance.
The right withdrawal rate depends on stock concentration, fixed-income allocation, retirement timeline, and spending flexibility in volatile markets, Mills explained.
Pulling money from the wrong account at the wrong time can create tax inefficiencies that erode savings faster than the withdrawal itself, he warned.
A formal spending plan doubles retirees’ confidence in their financial future
The Corebridge study identified one finding that ran counter to the broader pattern: retirees who created a formal spending strategy were significantly more confident about sustaining their lifestyles, the research found.
Among pre-retirees aged 55 and older who developed a decumulation plan, 57% reported high confidence in managing their retirement spending, compared with just 26% of those without one, the study showed.
The gap was similarly wide among current retirees, at 55% versus 29%, Corebridge reported.
The combined message carries weight for the roughly 80 million active employees whose savings are held in 401(k) plans.
