Report : DC Retirement | February 14, 2023

Big decisions at retirement

Read time: 24 minutes

After deciding to retire, retirement plan participants are faced with another choice that could shape the course of their retirement: What will they do with the money they’ve saved in their employer’s retirement plan?
Generally, many options are open to them. They could leave the money in their plan (depending on plan rules), keep some in the plan and take some out, roll over to another account like an IRA, withdraw the money entirely in cash, or a combination of all of these.

The decision typically lies with the individual, of course. But factors such as their account balance or plan design could force their hand.

So, what does the typical retiree do with their accumulated savings? In the new Vanguard paper, Retirement Distribution Decisions Among DC Participants, we examine the distribution behavior of plan participants as they leave their employer and head into retirement. 


  • All investing is subject to risk, including the possible loss of the money you invest.
  • When taking withdrawals from a tax-deferred plan before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax. Nonqualified withdrawals from a health savings account may be subject to taxes and a 20% federal penalty tax.