A newly released report from the Employee Benefit Research Institute (EBRI) is challenging the long-held assumption that retirement is a steady, predictable spend-down of savings. Instead, the research suggests that how retirees draw down their assets is far messier than the textbooks claim — and that guaranteed income streams, like defined benefit pensions, may be doing a lot of the heavy lifting behind the scenes.

The report, “Asset Decumulation Over Retirement and the Role of Guaranteed Income Streams,” analyzed three decades of longitudinal data from the 1992–2022 Health and Retirement Study to track how household net nonhousing assets evolve over the course of retirement.

The Headline Numbers

Between 1–2 years and 21–22 years postretirement, median household net nonhousing assets fell by 43%, 30%, and 42% for low-, middle-, and high-asset retired households, respectively. But here’s the twist: a sizable share of retirees across every asset group either preserved or actually grew their wealth.

– 37% of low-asset retirees held onto at least 80% of their assets, and 33% retained 100% or more.
– 48% of middle-asset and 42% of high-asset retirees kept 80% or more of their starting assets.
– 43% of middle-asset and 31% of high-asset households still had 100% or more of their assets 21–22 years into retirement.

On the flip side, decumulation was very real — especially for the low-asset group. With median starting assets of just $34,089, more than half of these households had roughly $17,000 or less left two decades in.

Pensions Made a Massive Difference

The most striking finding involves defined benefit pension income. Median assets for low-asset retirees without consistent income flows dropped 89% by 21–22 years postretirement. For those with defined benefit income? Just 29%.

“This research shows that retirement asset drawdown is far more complex than a simple spend-down pattern,” said Leslie Muller, Ph.D., senior research associate at EBRI. “For many households, especially those with limited assets, the presence of predictable lifetime income appears to be closely associated with greater financial stability and a stronger ability to preserve assets for unexpected expenses later in retirement.”

What This Means for Future Retirees

Here’s the catch: the cohort EBRI studied enjoyed relatively high rates of defined benefit pension coverage — a luxury most future retirees will not have. As the system shifts toward defined contribution plans like 401(k)s, the report argues that products designed to convert savings into predictable income — immediate annuities, deferred income annuities, qualified longevity annuity contracts (QLACs), and guaranteed lifetime withdrawal benefit features — may need to step into the role pensions once played.

Social Security alone, the report notes, is unlikely to fill that gap for households with limited assets.

The full takeaway: retirement readiness isn’t just about the size of your nest egg on day one. It’s about whether you have reliable income to keep that nest egg intact through the unexpected shocks of late life.

For more information or to request the complete report, visit http://www.ebri.org.