"It's the unknown that people are preparing for, and they want to be able to cover themselves," analyst Anna Madamba of the Vanguard Center for Retirement Research said in explaining the cash surplus. "When you plan for uncertainty, the force of that mindset is very strong."
The median withdrawal rate from tax-advantaged accounts was 4 percent, but curiously, the median spending rate was zero for withdrawals from retirement savings plans and 1 percent for distributions from IRAs, according to the Vanguard data.
"What it tells me is that maybe they have a nice pension and Social Security benefits, so they may never need to use this money," said Tim Steffen, director of financial planning at Robert W. Baird & Co.
"Required withdrawals get bigger as [time] goes on, so it's probably income that they are less likely to need," he said.
It's not typical for most retirees to have large required withdrawals.
For example, the average 401(k) plan at Vanguard held about $96,000 last year. But a fortunate few wind up with more cash than they need due to the forced distributions, which prompts the question: what to do with the extra cash? Here are a few suggestions that may strengthen your finances.