{"id":2362,"date":"2026-06-28T14:36:33","date_gmt":"2026-06-28T14:36:33","guid":{"rendered":"https:\/\/charlotterelocationguide.com\/?p=2362"},"modified":"2026-06-28T14:36:33","modified_gmt":"2026-06-28T14:36:33","slug":"retirees-face-surprising-problem-with-401ks","status":"publish","type":"post","link":"https:\/\/charlotterelocationguide.com\/?p=2362","title":{"rendered":"Retirees face surprising problem with 401(k)s"},"content":{"rendered":"

American workers have steadily built up 401(k)<\/a> balances, but new research suggests they remain poorly prepared to spend down those savings once paychecks stop. <\/p>\n

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Three studies published in June 2026 by the TIAA Institute\/Nuveen<\/a>, Corebridge Financial<\/a>, and Vanguard<\/a> all converge on the same problem.<\/p>\n

The retirement<\/a> system has succeeded on the accumulation side, with $8 trillion in assets spread across 725,000 plans serving 80 million workers, according to Nuveen. <\/p>\n

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.<\/p>\n

The gap between accumulation and decumulation represents a significant planning shortfall, and research suggests most workers are not prepared for it.<\/p>\n

The TIAA Institute and Nuveen<\/a> surveyed more than 2,100 employees across all career stages for their 2025 Participant Sentiment Survey on Lifetime Income.<\/p>\n

Among the full sample, only 22% said they had given serious thought to how they would draw down their retirement accounts<\/a>, the study found. <\/p>\n

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.<\/p>\n

Margie Glenn, a certified financial planner and certified public accountant at Moneta, told Yahoo Finance<\/a> that retirees without a formal distribution plan risk burning through savings too fast or holding back too much.<\/p>\n

Without a formal distribution plan, you are flying blind\u2026You 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<\/p>\n

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.<\/p>\n

“You can’t solve for income that lasts a lifetime if you don’t understand how long that lifetime might be,” Surya Kolluri<\/a>, head of TIAA Institute, noted.<\/p>\n

A Corebridge Financial study<\/a> reinforces how deeply the accumulation mindset has taken hold among Americans approaching and entering retirement. <\/p>\n

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. <\/p>\n

While 61% described retirement as a time meant for enjoyment, 50% said they feel uncertain about spending down their savings, Corebridge reported.<\/p>\n

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. <\/p>\n

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.<\/p>\n

“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,<\/a> president of Retirement Services at Corebridge Financial, said.<\/p>\n

Read more Mark Cuban reveals what people really hate about AI data centers<\/a><\/p>\n

Milan_Jovic\/Getty Images<\/a><\/p>\n

In a research paper published in early June 2026 titled “Principles for Retirement Income,”<\/a> Vanguard introduced a framework that shifts the retirement conversation away from savings targets and toward reliable income generation.<\/p>\n

The firm argues that two investors with identical savings can have vastly different outcomes depending on their withdrawal strategies. <\/p>\n

Vanguard’s framework recommends separating essential costs from discretionary spending and pairing guaranteed income sources with flexible portfolio withdrawals, as outlined in the paper.<\/p>\n

More Retirement:<\/strong><\/p>\n

“The last day of work is a milestone, but retirement is a long journey shaped by decisions that evolve over time,” Garrett Harbron<\/a>, Vanguard head of advised wealth management strategies, said.<\/p>\n

The research illustrates the stakes with a simple model that shows how dramatically withdrawal rates can change outcomes. <\/p>\n

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>.<\/p>\n

One commonly cited guideline suggests withdrawing 4% of total retirement savings<\/a> in the first year and adjusting for inflation<\/a> each year after that. <\/p>\n

A revised version, updated from the original framework first published in the 1990s, raises the sustainable starting rate to 4.7% for diversified portfolios.<\/p>\n

“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<\/a>.<\/p>\n

The right withdrawal rate depends on stock concentration, fixed-income allocation, retirement timeline, and spending flexibility in volatile markets, Mills explained. <\/p>\n

Pulling money from the wrong account at the wrong time can create tax inefficiencies that erode savings faster than the withdrawal itself, he warned.<\/p>\n

The Corebridge study<\/a> 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.<\/p>\n

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. <\/p>\n

The gap was similarly wide among current retirees, at 55% versus 29%, Corebridge reported.<\/p>\n

The combined message carries weight for the roughly 80 million active employees whose savings are held in 401(k) plans<\/a>.<\/p>\n

Related: Retirees face a harder path to $1 million<\/a><\/strong><\/p>\n

The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.<\/i><\/p>\n

Read more Dead tree in remote NC is hiding colony of rarely seen creatures, biologists say<\/a><\/p>\n

This story was originally published June 28, 2026 at 10:17 AM.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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.<\/p>\n","protected":false},"author":1,"featured_media":2360,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2362","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-read-todays-edition"],"yoast_head":"\nRetirees face surprising problem with 401(k)s - \u0421harlotte Relocation Guide<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/charlotterelocationguide.com\/?p=2362\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Retirees face surprising problem with 401(k)s - 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