Retirement may not unfold the way most people (or planners) expect, and new research from the suggests that without a reliable income floor, the consequences can be severe.
The Employee Benefit Research Institute study tracked how household net non-housing assets shifted across a roughly three-decade window using longitudinal data from the 1992–2022 Health and Retirement Study. What it found challenges the conventional image of retirement as a steady, predictable spend-down of accumulated wealth.
Asset drawdown varied dramatically depending on how much a retiree started with and whether they had a pension to fall back on.
Across all three wealth groups studied, median non-housing assets dropped significantly over a 21-to-22-year retirement window. Low-asset retirees saw a 43% decline, the middle group 30%, and high-asset households 42%.
But those headline numbers don't capture the full picture and a substantial share of retirees in every group actually held on to a surprising portion of what they started with.
Among low-asset households, 37% still had at least 80% of their original asset value intact more than two decades into retirement, with a third retaining everything they began with or more. The middle-asset group fared even better, with 48% preserving 80% or more, and 43% ending the period with assets equal to or exceeding their starting point.
However, more than half of low-asset retirees had burned through more than half of their starting assets by that same 21-to-22-year mark. With a median starting balance of just $34,089, that left many of them with roughly $17,000 or less to cover whatever life threw at them in their final years.
The presence or absence of defined benefit pension income proved to be a decisive factor, particularly for those with fewer resources.
Among low-asset retirees without any consistent guaranteed income, median assets fell by 89% by the 21-to-22-year mark. For those with defined benefit income, the comparable decline was 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. As more retirees rely on defined contribution plans rather than traditional pensions, understanding how savings can be converted into sustainable income will become increasingly important for employers, plan providers, policymakers and retirees themselves."
Those entering retirement with less than $200,000 in non-housing assets experienced asset erosion at a rate broadly similar to wealthier peers, but with far less margin for error. A comparable percentage decline on a $34,000 nest egg versus a $500,000 one is not a comparable outcome. For lower-wealth households, unexpected medical costs or the death of a spouse can prove financially devastating.
The study also flags a concern that doesn't get enough attention: that high asset balances in late retirement aren't always a sign of good planning. In some cases, they may reflect unnecessary underspending, inefficient self-insurance strategies, or the use of tax-advantaged accounts primarily as inheritance vehicles rather than retirement support tools.
Looking ahead, the report sounds a warning about what happens when the defined benefit safety net disappears entirely.
The retirees studied benefited from unusually high rates of pension coverage across all wealth groups — a characteristic that will not apply to future retirees in the same way. While Social Security provides a foundational income stream, it is unlikely to be sufficient on its own, particularly for those with modest accumulated savings.
Products that can replicate the income stability of a pension — immediate annuities, deferred income annuities, qualified longevity annuity contracts, and guaranteed lifetime withdrawal benefit riders — may therefore need to move from the periphery of retirement planning conversations to the center.
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