How do people manage their income and spending in retirement? How do they adjust their asset allocation as they transition into retirement? Certainly, there is survey data on the subject and much informed speculation. Yet the full picture—based on empirical evidence that shows how people actually behave—has remained elusive.
Drawing on an Employee Benefit Research Institute (EBRI) database of more than 23 million 401(k)1 and IRA accounts, and JPMorgan Chase data for around 62 million households, we studied 31,000 people as they approached and entered retirement between 2013 and 2018 to demystify what actually happens as people transition into retirement.2