Saving for Retirement Got Easier. Spending It Is the New Puzzle, Vanguard Says

On October 29, 2026, Vanguard, based in Valley Forge, Pennsylvania, released How America Retires 2026, its second annual report on how retirees in its workplace plans invest, manage and withdraw their savings. Vanguard says most retirees did not rush to cash out, and that flexible withdrawal options kept more of them in their plans.¹²

The headline finding is encouraging. Vanguard credits improved savings habits, and plan features designed to encourage long-term investing, with helping Americans save better for retirement.¹ Its companion report, How America Saves 2026, covered nearly five million workers. It found that savers are in a stronger position than ever and that average plan participation grew to 86%.¹⁵

The catch is the next step. Spending in retirement, Vanguard says, is “vastly more personalized,” and retirees need more education, advice and flexible plan design to turn a balance into sustainable income.¹

A note on the source: Vanguard sells retirement products and services. These numbers come from its own analysis of its own plan data, and no outside party has checked them. The report is written for employers who run plans, not for consumers.

Most retirees left their savings alone

Only 15% of retirees took all the cash out of their workplace retirement accounts in the year they retired, according to Vanguard.¹ Among retirees ages 60 to 72, Vanguard’s report page says 78% took no withdrawals at all, and 95% of retirees with at least $100,000 preserved their savings.²

About half of retirees stay in their workplace plan at first, though many later roll the money into another account, such as an individual retirement account (IRA).¹ A summary of the report puts it at 48% of 2025 retirees staying in their plan and 31% moving assets into an IRA, up from 27% in 2021.⁷

What the findings point to

Vanguard’s report is aimed at employers, but some findings may interest anyone heading toward retirement. This is not personal financial advice. Investing involves risk, and the right choices depend on each person’s situation.

• Flexible withdrawals matter. Recent retirees were more than 40% more likely to stay in their plan when it offered options like partial withdrawals and installment payments.¹
• Steady installments tended to mean smaller withdrawals. Retirees who took regular installments generally withdrew smaller portions of their accounts than people who withdrew now and then. Vanguard suggests employers consider offering installments for steady income.¹
• Many self-directed portfolios lean to extremes. About 40% of today’s retirees who pick their own investments hold portfolios that are very aggressive or very conservative. Vanguard suggests this may reflect choices made before target-date funds, which automatically adjust a mix as a chosen retirement year approaches, were widely available.¹

For employers, Vanguard recommends three things: professionally managed investment options, low-cost personalized advice and installment payment options.¹

“Education, advice, and thoughtful retirement plan design can help retirees understand their options and spend with confidence.”

That was Lauren Valente, managing director of Vanguard Workplace Solutions, in the company’s announcement. She also said that defined contribution plans, the workplace retirement plans the report covers, “have helped millions of Americans make meaningful progress in building the savings they need for retirement.”¹

The series so far

Vanguard introduced How America Retires in November 2025 as a companion to How America Saves.⁴ Citing the Alliance for Lifetime Income, Vanguard’s report page says more than 11,000 Americans turn 65 every day.²

Vanguard says employers, advisors and the industry have an opportunity to better support retirees in turning their savings into sustainable income.¹