Retired baby boomers who are saving for retirement through defined contribution (DC) plans like 401(k)s are drawing down their savings faster than their counterparts in previous generations who had pensions and other defined benefit (DB) plans, according to recent industry research. On top of that, baby boomers who may be relying solely on their DC plans may wind up with less savings for retirement than their counterparts who waited longer to withdraw savings from their defined benefit plans — and could, therefore, outlive their assets.
A July 2022 report from the Center for Retirement Research at Boston College found that, while most households whose heads were born between 1920 and 1940 had access to a defined benefit plan such as a pension, the youngest boomers, who were born in 1965, have almost no access to these types of plans. Instead, nearly all of them have access to DC plans, which are predominantly 401(k)s.
