How Advisers Can Break Down Barriers Between Saving, Spending

Five behavioral barriers prevent participants from saving and spending comfortably in retirement, but the industry is capable of building “infrastructure” to address each, according to a new white paper from the Institutional Retirement Income Council.

“The Last Mile of Retirement,” released today, suggested that underspending in retirement can come at the cost of years of saving for comfort. When participants lack a well-designed plan for spending in retirement, they default to “fear-driven” choices or leave the system entirely through rollovers—removing assets from institutional pricing and fiduciary oversight.

“The opportunity is to build behavioral infrastructure for decumulation: defaults, education, guidance, planning tools and retirement income, delivered by the providers closest to the participant,” the paper stated. “Each provider holds a distinct lever.”

Switching Off ‘Save More, Spend Less’

The first hurdle IRIC named in its paper is switching off participants’ “save more, spend less” mentality. In response to a recent Corebridge Financial survey, only 28% of pre-retirees and retirees reported being comfortable drawing down their savings, and 38% said they deliberately underspent to protect their nest egg.

The paper suggested that advisers, wellness providers and recordkeepers should reframe “drawdown” as a personal paycheck, giving participants “permission” to spend their assets.

Kevin Crain, IRIC’s executive director and the author of the paper, suggests advisers and providers coach participants on how to separate their expenses into “buckets” to make the expense budgeting process in retirement more manageable.

Compartmentalizing expenses will make pre-retirees and retirees “feel more in control,” Crain says, while also empowering them to make discretionary purchases that they prioritize. Rather than dealing with one big number to divide into essential and discretionary purchases, he says participants will feel they can spend relatively “guilt-free.”

A Paycheck as a Plan

Participants must also overcome the hurdle of self-funding their monthly “paycheck” in retirement, IRIC’s paper contended. Corebridge’s survey found only 29% of pre-retirees age 55 and older have a plan for how they will withdraw income in retirement.

Plan sponsors can add options such as scheduled withdrawals and various retirement income selections to their plan menus. By doing that, they can remove the barriers that currently encourage separated participants to roll assets out of the plan. Keeping participants in the plan longer can be an advantage for sponsors as well as participants, Crain says, as more participant assets in the plan can keep recordkeeping prices lower.

Recordkeepers, meanwhile, can redesign statements, portals and apps to show participants a projected monthly “paycheck,” rather than just an account balance. The projected income should include future contribution projections, suggestions for withdrawal strategies and Social Security election modeling tools.

In addition, recordkeepers should give sponsors the opportunity to offer automated, systematic withdrawals, scheduled monthly payouts, required minimum distribution automation and retirement-income calculators, the paper suggested. They can also add lifetime income options to the platform and streamline enrollment to make choosing a “paycheck for life” simpler.

Decumulation Biases

Sequence-of-returns risk, underestimations of longevity and an overwhelming number of decumulation choices can “paralyze” retirees, the paper stated. Some 56% of surveyed retirees said they fear running out of money in retirement, and only 6% feared leaving money behind, according to the Corebridge survey.

Advisers, sponsors and recordkeepers can help, however, by providing default offerings and decision support designed to root out biases, the report stated. For instance, advisers can counsel participants about withdrawal sequencing and timing for Social Security claims. Plan sponsors might expand their advice and wellness support offerings for pre-retirees to provide them with guidance—not just education.

The ‘Annuity Paradox’

IRIC’s paper contended that guaranteed income is valued, though underutilized, due to its framing as an investment, rather than as a paycheck. About three-quarters of respondents to Corebridge’s survey said guaranteed income would improve their spending or insurance against longevity. Yet adoption remains in its early stages: among plan sponsor respondents to the PLANSPONSOR 2026 Plan Benchmarking Report, published by PLANADVISER’s sister publication, only 16% said they offer in-plan insurance-based products that guarantee income.

Recordkeepers can add lifetime income options to their platforms to streamline enrollment for participants, the paper suggested. Meanwhile, plan sponsors can help participants by assessing in-plan income products for cost, portability and insurer strength. As part of a documented fiduciary process, sponsors can use the annuity-selection safe harbor extended under the SECURE 2.0 Act of 2022 to add retirement income options with “fiduciary confidence,” IRIC’s paper stated.

Loss of Identity and Purpose

Crain says one barrier may not be overcome solely by infrastructure: While work provides “structure, status and connection,” losing it “triggers a honeymoon-to-disenchantment arc money can’t fix,” the paper stated.

Crain says a participant’s loss of identity and purpose is an obstacle that is difficult for industry players to assist with, though plan sponsors can provide employees with off-ramps that ease both the financial and identity transitions out of full-time work.

There are ways for participants themselves to handle feelings of lost identity. Someone in the industry gave Crain advice—that he heeds closely—to avoid describing oneself as “retired” on LinkedIn.

“Talk about what you still want to advocate for [in retirement]. How involved in the industry do you still want to be?” Crain suggests retirees consider. “That [helps] the individual attitudinally, … and [they’ll] probably then have more time [to advocate] and less stress about the loss of identity and purpose.”

Corebridge fielded its survey in October and November 2025 among 2,210 adults aged 45 through 79 who had at least $100,000 in investable assets.

The 2025 PLANSPONSOR Defined Contribution Survey, upon which the benchmarking report is based, was fielded in mid-2025. The results incorporated the responses of 4,387 plan sponsors.