Abandoning the Nest Egg? 401(K) Plans and Inadequate Pension Saving
40 Pages Posted: 5 Nov 1996 Last revised: 19 Sep 2022
Date Written: May 1996
Abstract
There has been rapid growth in `self-directed' pension programs such as the 401(k) plan. Because such plans are voluntary, there is concern that many workers neglecting to contribute will reach retirement with inadequate pension saving. First, we show that people who are eligible for 401(k)s, do not contribute to them, and have no alternative pension plan make up only 2-4 percent of the workforce. By contrast, nearly 50 percent of workers have no pension coverage at all. Imposing mandatory 3 percent or 5 percent contribution rates will improve retirement prospects among the lowest decile of pension- eligible, but would have small aggregate effects. Finally, restricting 401(k) withdrawals when the worker changes jobs could have a larger impact on retirement pension security.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance
By James J. Choi, David Laibson, ...
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2000
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2001
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 1999
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2002
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2003
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2004
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2005
By Sarah Holden and Jack Vanderhei
-
401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 1998
By Jack Vanderhei, Sarah Holden, ...
-
401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2009
By Jack Vanderhei, Sarah Holden, ...