The latest Issue Brief publication from the Employee Benefits Research Institute (EBRI) shows only a very small percentage of defined contribution (DC) and individual retirement account (IRA) balances are annuitized in a given year.
What’s perhaps more surprising is that a significant percentage of defined benefit (DB) plan accruals have been taken as lump-sum distributions when the option was available. According to EBRI, the hesitation to annuitize retirement savings can leave individuals exposed to longevity risk and other challenges, such as uncertainty about how much one can spend monthly without risking running low on funds at some point during retirement.
