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

See all articles by Sebastian Devlin-Foltz

Sebastian Devlin-Foltz

Board of Governors of the Federal Reserve System

Alice Henriques Volz

Board of Governors of the Federal Reserve System

John Sabelhaus

Brookings Institution

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

Devlin-Foltz, Sebastian and Henriques Volz, Alice and Sabelhaus, John, The Evolution of Retirement Wealth (February 7, 2015). FEDS Working Paper No. 2015-009, http://dx.doi.org/10.17016/FEDS.2015.009, Available at SSRN: https://ssrn.com/abstract=2571492 or http://dx.doi.org/10.2139/ssrn.2571492

Sebastian Devlin-Foltz

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Alice Henriques Volz

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

John Sabelhaus (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

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