The 401(k) Solved Saving, Not Spending
The workplace retirement system has gotten very good at one job: accumulating money. Automatic enrollment and automatic escalation work — 96% and 97% of participants subject to them report satisfaction, according to J.P. Morgan Asset Management's 2026 Plan Participant Survey.
What the system has not solved is the opposite problem: converting that balance into a paycheck that lasts. Three surveys released this year quantify how wide that gap has become — and it is a gap between what savers want and what plans actually offer.
The Mismatch, in Two Numbers
J.P. Morgan's survey, fielded in January 2026 among 1,716 defined contribution participants and 512 retired participants, found that 91% expressed interest in an in-plan guaranteed retirement income solution. Three in four (75%) said they would likely keep their assets in the plan if it offered one.
Now the employer side. WTW's 2026 Defined Contribution Survey, released August 3 and fielded April 15 through May 22 among 547 U.S. plan sponsors, found that just 30% plan to offer an in-plan retirement income solution. This was not a survey of small employers — more than 60% of respondents hold at least $1 billion in DC assets, and 72% also run a defined benefit plan.
Ninety-one percent of demand. Thirty percent of supply.
WTW frames the broader issue as a "retirement outcomes gap." Only 60% of sponsors even have a working definition of retirement readiness. "Employers have invested heavily in retirement programs, but the next challenge is proving these programs are moving employees closer to retirement readiness," said Chris West of WTW.
Savers Are Not Filling the Gap Themselves
LIMRA's Retirement Income Readiness Report, released August 5 and fielded in April among 486 pre-retirees (age 45+, retiring within 10 years) and 804 retirees, found that while 88% have thought about how they will generate retirement income, 50% lack a recently updated written plan. Fully 76% either have no plan or spend fewer than five hours a year on planning.
Their top concerns were cost-of-living increases (43%) and outliving savings (30%).
LIMRA's data also shows what closes the gap. Among pre-retirees working with a financial advisor, 77% rated themselves highly prepared, versus 47% without one. Among those with a pension or annuity, 78% felt highly prepared versus 50% without. Yet only 8% of the least-prepared consumers work with an advisor at all.
Critically, only 25% of pre-retirees believe their protected income sources will cover essential expenses — while 52% of current retirees say their guaranteed income does cover basic needs.
Practical Takeaways
- Ask your HR department directly whether your plan offers or is adding an in-plan income option. Do not assume the 91% demand figure means it is coming to your plan.
- Do not wait for your employer. If your plan lacks an income option, building an income floor outside the plan — through Social Security claiming timing, an IRA annuity, or a bond ladder — is the alternative.
- Write the plan down. The LIMRA split between "thought about it" (88%) and "documented it" (50%) is the single widest gap in the data. Five hours a year is a low bar most people are not clearing.
- Stress-test the phased-retirement assumption. J.P. Morgan found 44% expect to retire gradually by reducing hours — but only 12% of actual retirees experienced it that way.
- Know what your guaranteed income actually covers. Add up Social Security and any pension, compare it to essential expenses, and size the shortfall before choosing products.
The accumulation phase runs largely on autopilot. The decumulation phase, for now, still does not.
Sources: WTW – 2026 Defined Contribution Survey (August 3, 2026); LIMRA – 2026 Retirement Income Readiness Report (August 5, 2026); J.P. Morgan Asset Management – 2026 Plan Participant Survey; 401(k) Specialist; InsuranceNewsNet.