A survey of affluent retiree households showsthat, despite having a median total household income similar to“traditional retirement” households, they rely more on withdrawalsfrom financial accounts for retirement income than the latter.

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A Vanguard paper titled “Withdrawals from financial accounts inretirement,” by Anna Madamba, Ph.D., and Stephen P. Utkus,explored where retirement income comes from inwealthier households, and how much of that income is spent. Thestudy also looked at the types of accounts owned by households andwhether the type of account affected how money is spent duringretirement.

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Related: 10 places where retirement security isbetter than in the U.S.

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The study divided households into two segments: the “traditionalretirement” group, made up of households whose wealth holdingsconsist largely of guaranteed income sources like Social Securityand pension income, and the “new retirement” group, which haspredominant wealth holdings from financial accounts, includingtax-deferred retirement accounts, a variety of taxable investmentand insurance accounts, as well as bank checking and savings, moneymarket, and similar accounts.

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Among the study’s findings was where the two groups’ incomesoriginated. For both groups, the median total household income wasabout $69,500. The two groups of retirees, traditional and newretirement, showed very similar median incomes, the study said, andoverall, a quarter of retirement income for wealthier householdscomes from financial account withdrawals.

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But when it came to those financial account withdrawals, the newretirement group’s withdrawals made up an average of 39 percent oftheir retirement income; that’s more than twice as much as suchwithdrawals contributed to traditional retirement households.

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In addition, withdrawals from retirement accounts are often mademore to comply with required minimum distribution rules and theirattendant tax penalties, and less because those households use themoney.

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In fact, nearly a third of such withdrawals are saved andreinvested in other accounts—while those households spend less thanthey withdraw.

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The researchers found that the median withdrawal rate fromfinancial accounts is just 3 percent, while the median spendingrate—only the portion of a withdrawal actually used forconsumption—is even lower.

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When RMDs are taken, it’s not always so retirees can spend themoney. In fact, 31 percent of such withdrawals are saved andreinvested, rather than spent. And regardless of where the moneycame from—financial accounts or pensions and Social Security—thecomposition of retiree spending did not change. The proportion ofincome spent on various kinds of expenses is similar, no matter thesource of the income.

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The study also found that approximately a quarter of thehouseholds in the study have spending rates of 5 percent or more,and may be at risk of exhausting their financial assets.

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