Transitioning from accumulation to income generation requires a fundamentally different investment mindset. Offering a structured framework for income-oriented portfolio construction, this piece guides plan sponsors and investors through the allocation decisions that matter most—balancing growth potential, downside protection, and the sustainability of cash flows throughout retirement.

Financial decision-making is a complex and ambiguous process. Over an employee’s lifetime, numerous factors will contribute to their household’s ultimate financial outcomes. How each financial decision interacts with the next is an area that is imperfectly understood. Consequently, although employers often strive to offer customized experiences for their retirement plan participants, the degree to which they can improve outcomes across diverse ranges of unique household situations is still an area of ongoing research.

Present bias, inertia, and loss aversion consistently undermine the retirement saving decisions of even well-intentioned participants. Identifying the specific behavioral barriers most likely to erode long-term outcomes, this paper evaluates how targeted financial literacy interventions can help participants recognize and override the cognitive shortcuts working against their financial futures.

Modern DC plans are highly effective retirement “savings” vehicles. Yet, many DC participants still struggle with retirement spending. The most vulnerable often overspend when facing financial distress. The most secure tend to curb spending until they are forced. Plan sponsors evaluated tools, tips, and plan design features that can transform retirement “savings” plans into retirement “spending” plans.

In this research report by the DCIIA Investment Policy & Design Committee, building on past DCIIA work, we examine current defaults and emerging solutions in the context of the themes, also considering current and likely future adoption. We provide, as a call to action, questions to reflect and act on for plan sponsors, service providers, and advisors in an Action Kit.