The rise of retirement income in DC plans
Supporting participants as they transition from saving for to living in retirement.
- Retirement income from DC plans is becoming a priority: With about 1 in 4 workers age 55 or older,¹ almost $2 trillion in DC assets among pre-retirees and retirees (on Fidelity’s platform),² and 86% of private industry workers lacking access to a pension,³ DC plans are increasingly central to delivering retirement income. Yet, nearly 80% of rollover-eligible participants are unaware of all their distribution options, highlighting a critical guidance gap.⁴
- Staying in the plan can support access to retirement income: Potential participant benefits include access to institutional solutions and pricing, trusted guidance and support, simpler income decisions, and income stability. While most participants remain in their plan during their separation year, the amount falls to about 20% after 5 years, suggesting unmet post-retirement needs.⁵
- Sponsors are adopting in-plan solutions—but gaps remain: Nearly 8 in 10 plan sponsors prefer that retirees have the flexibility to stay in the plan while taking withdrawals as needed,⁶ but only 40% of plans offer automatic withdrawals.⁷ Managed accounts reach about half of plans,⁷ and about 1 in 5 sponsors have or plan to add guaranteed income⁸—despite its potential to help stabilize outcomes and address longevity and market volatility concerns.
- Plan sponsors may benefit from weighing opportunities and considerations: Stay-in-plan options may provide benefits to organizations such as scale and cost efficiency, talent attraction and retention, and workforce planning. Key considerations include participant communication and education, potential investment lineup changes, and administrative monitoring and oversight.
- An intentional approach can better support retirement outcomes: Effective stay-in-plan models can help participants manage tradeoffs through clear communication, accessible tools, and coordinated plan design that provide guidance, flexibility, and income support. Because each solution serves a different purpose, providing multiple options can help sponsors support a broader range of participant needs.
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1. US Census Bureau, “U.S. Workforce is Aging, Especially in Some Firms,” December 2025.
2. Fidelity recordkept data, internal analysis of DC participant balances (excluding Tax-Exempt Market (TEM) as of December 31, 2025. Pre-retirees are active participants age 50+; retirees are inactive participants age 60+.
3. US Bureau of Labor Statistics, “Retirement benefits: Access, participation, and take-up rates for defined benefit and defined contribution plans,” March 2025. Access is defined as a pension offered by an employer.
4. Government Accountability Office (GAO), “401(k) Retirement Plan Tax Notices: Federal Actions Can Help Participants Understand Their Distribution Options,” 2024. Figure reflects surveyed 401(k) participants who completed or were eligible to complete a plan-to-plan rollover within the prior 3 years.
5. Fidelity recordkept data as of December 31, 2025, among participants age 60+ who are separated from their employer. They may or may not be retired. Only active, qualified, nonpooled corporate DC and TEM plans having a positive overall plan balance were considered. This analysis reflects participants in plans active as of December 31, 2025, and incorporates plan implementations. It does not adjust for plans that deconverted during the measurement period (2016–2025). As a result, some reductions in stay-in-plan rates may reflect plan deconversions rather than participant asset-retention behavior.
6. Fidelity plan sponsor panel workplace, retirement income survey, February 2026.
7. Fidelity Investments Q1 2025 401(k) data based on 26,800 corporate defined contribution plans and 25.6 million participants as of March 31, 2026. These figures include the advisor-sold market but exclude the tax-exempt market. Excluded from the behavioral statistics are nonqualified defined contribution plans and plans for Fidelity’s own employees.
8. Fidelity plan sponsor panel workplace, retirement income survey, February 2026.