The last mile of retirement is a planning gap advisors can close

Just 29 percent of pre-retirees aged 55 and older have a plan for drawing down their savings, according to a new report from the Institutional Retirement Income Council flagged by NAPA Net. The other 71 percent enter decumulation with no spending strategy at all.

The report, titled "The Last Mile of Retirement," spells out the biases that make decumulation hard. Fear of running out of money makes retirees spend less than they should. Show them the same money as a monthly check, though, and the caution loosens: they spend more readily when a payment arrives as income than as an account balance. Sequence-of-returns risk, underestimated longevity, choice overload, and present bias compound the problem. IRIC calls the result analysis paralysis. Some participants fall back on fear-driven choices. Others exit through rollovers, losing the plan's institutional pricing and fiduciary oversight.

IRIC wrote this for plan sponsors and recordkeepers, not for advisors. But the remedies carry straight into the decumulation conversation. The report's answer to these biases is what it calls "behavioral infrastructure": scaffolding that makes the right choice the easy one.

At the plan level, that infrastructure includes income modeling tools that turn a balance into a monthly figure, automatic systematic withdrawal plans, and nudges timed to retirement, separation, or ages 55 and 59. It also includes framing: present a guaranteed product as a source of income rather than an investment, and participants respond more favorably. And it includes keeping assets in the plan, where pricing is institutional and oversight is fiduciary.

An advisor's version of that infrastructure looks similar. Model the monthly income before mentioning a product. Propose a systematic withdrawal plan as the default instead of a long menu of choices. Time the conversation to life events, not calendar quarters. Describe every product in the language of income — "this replaces X percent of your paycheck" — not yield or total return. The report concludes that pre-retirees do not lack income products. They lack a spending plan. Advisors who build that plan first are doing what IRIC recommends before the biases take hold.