A growing body of research is sharpening the focus on a critical gap in retirement systems worldwide: the failure to convert savings into dependable income.
New findings released by Prudential Financial alongside the Global Aging Institute argue that lifetime income solutions, long viewed as optional, are becoming essential as demographic and structural pressures reshape retirement outcomes.
The research builds on a broader 2026 report, The Case for Lifetime Income, which warns that the global shift toward defined contribution (DC) plans has left individuals increasingly exposed to longevity risk, often without the tools to manage it effectively.
While retirement balances have grown across many markets, the latest analysis underscores a key weakness that most systems still rely on retirees to manage withdrawals on their own.
“Retirement security is one of the most defining issues of our time and solving for it will require collaboration across employers, financial institutions, and policymakers,” said Phil Waldeck, head of US Businesses at Prudential Financial.
The shift from accumulation to decumulation is central to the report’s argument. While DC systems have expanded participation and asset growth, they often lack mechanisms to turn those assets into guaranteed income streams.
The study finds that many retirees remain reliant on lump-sum withdrawals or ad hoc income strategies, approaches that “contain fundamental risks of inaction” in the face of rising life expectancy.
The research points to significant efficiency gains from adopting lifetime income structures.
Pooling longevity risk allows retirement systems to deliver the same level of security at roughly 20% lower cost, while also enabling retirees to spend more confidently without fear of running out of money.
But without broader adoption, those gains remain largely unrealized.
“Our analysis shows that when countries fail to make adequate provision for lifetime income, it greatly reduces the efficiency and increases the cost of their retirement systems while needlessly leaving individuals at risk of outliving their savings,” said Richard Jackson, president of the Global Aging Institute and co-author of the report.
The findings echo the report’s broader conclusion that retirement systems focused primarily on saving, rather than income delivery, may fall short of their core objective.
Momentum is beginning to build among policymakers, with several countries exploring ways to integrate lifetime income more directly into retirement frameworks.
The research outlines a range of potential solutions, including making lifetime income the default option in workplace plans, expanding access to annuities, and improving how retirement balances are communicated to savers.
It also emphasizes the importance of flexibility, noting that solutions must balance guaranteed income with liquidity and individual choice.
Policymakers are increasingly recognizing that higher savings alone will not solve the retirement challenge, and as the report highlights, retirement systems that fail to incorporate income solutions risk leaving individuals to navigate complex financial decisions on their own, often with suboptimal outcomes.
At its core, the research calls for a rethinking of retirement design to one that prioritizes sustainable income rather than account balances.
It warns that, without structural changes, the industry risks perpetuating a system where individuals bear the burden of longevity risk alone. With them, proponents argue, lifetime income could become the foundation of more secure and efficient retirement systems worldwide.
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