Turning Workplace Savings into Retirement Income

As access to traditional defined benefit plans have declined over the past few decades, the U.S. retirement system has increasingly shifted toward defined contribution (DC) plans. Workplace retirement plans such as 401(k)s and 403(b)s are the primary defined contribution plans through which many workers now save for retirement. Within this defined contribution system, policy and plan design have historically placed greater emphasis on helping people accumulate savings than on supporting how those savings are used after retirement.

This emphasis on accumulation has played an important role in improving financial security for many older adults. However, many people are now reaching retirement uncertain about how to turn their savings into steady income. As a result, some people spend less than they likely could and may cut back on important expenses because they are unsure how to draw down their savings in a way that will last throughout retirement.

In recent years, policymakers and employers that sponsor workplace retirement plans for their employees have shown growing interest in approaches that help people convert retirement savings into income. These retirement income approaches are intended to help people use their savings to meet their needs and preferences in retirement, while also helping protect against outliving their savings.

As workplace retirement plans consider options to support retirement income, individuals may be asked to make choices that involve tradeoffs between control over their money, access to funds, fees, and legal protections. Understanding how people view these tradeoffs is important for designing policies and plan features that reflect consumers’ values and interests.

This study reveals people’s values and interests by exploring how they respond to different retirement income options in workplace retirement plans and how their views change when key features and limitations are made explicit. The study is based on responses from 1,422 adults ages 50–70 who have access to a workplace retirement plan and are not yet retired (i.e., Defined Contribution participants). The survey was fielded in November and December 2025.

Through this research, we identified four key findings that should help inform future discussions about how to help people draw down their workplace retirement savings:

1. Many defined contribution participants worry about running out of money in retirement, but most haven’t developed a plan to make sure their savings lasts.
2. Defined contribution participants prefer automatic distribution over managed distribution and annuities for generating retirement income from their workplace retirement savings account, likely because it offers greater control and easier access to their savings.
3. Most defined contribution participants lack the knowledge needed to evaluate annuities and make well‑informed decisions.
4. Defined contribution participants initially show high interest in annuities, but their support drops significantly as they learn more about them.

Methodology

In late 2025, AARP commissioned a national survey of 2,063 adults ages 50 to 75 with access to an employer-sponsored retirement plan to understand their attitudes and behaviors related to various approaches to retirement savings decumulation. Interviews were conducted between November 24 and December 8, 2025, online and by telephone. The data are weighted by age, gender, census division, race/ethnicity, educational attainment, and AARP membership. The current report focuses on a subset of 1,422 respondents who were between the ages of 50 and 70 and not retired.

For more information, please contact Bryan Miller at bmmiller@aarp.org. For media inquiries, contact External Relations at media@aarp.org.