Past generations drew down their wealth slowly in retirement, leaving much of their savings untouched. However, this pattern may not hold as the Baby Boomer generation retires, because they are less likely to have a defined benefit (DB) plan and will need to tap the assets in their defined contribution (DC) plans to support their consumption.
The Center for Retirement Research studied the relationship between access to DB plans and the speed at which past generations drew down their wealth. It found that having access to a DB plan was associated with slower drawdown of retirement wealth. The larger the share of retirees’ resources in an annuity-like form — either DB plans, Social Security benefits, or commercial annuities — the slower they drew down their wealth.
It concluded that forecasts for the Baby Boomer generation based on the drawdown of past generations likely underestimate their drawdown speed. Also, Baby Boomers reliant on DC plans could run a greater risk of outliving their savings than earlier generations.
See the full paper here