The Evolution of Retirement Wealth
FEDS Working Paper No. 2015-009
http://dx.doi.org/10.17016/FEDS.2015.009
36 Pages Posted: 6 Mar 2015
Date Written: February 7, 2015
Abstract
Is the current mix of tax preferences for employer-sponsored pensions and individual retirement saving in the U.S. delivering the best possible retirement-preparedness across and within generations? Using data from the triennial Survey of Consumer Finances for 1989 through 2013, cohort-based analysis of life-cycle trajectories shows that (1) overall retirement plan participation was relatively stable or even rising through 2007, though participation fell noticeably in the wake of the Great Recession and has remained lower, (2) participation is strongly correlated with income, and the shift in the type of pension coverage occurred within — not just across — income groups, (3) relative to previous cohorts and a counterfactual lifecycle benchmark, the recent decline in retirement plan participation and DC retirement account balance-to-income ratios is concentrated among younger families and lower-income families.
Keywords: Lifecycle, Pension, Retirement
JEL Classification: D14, H55, J32
Suggested Citation: Suggested Citation