Abandoning the Nest Egg? 401(k) Plans and Inadequate Pension Saving / Andrew A. Samwick, Jonathan Skinner.

Format:

Book

Author/Creator:

Samwick, Andrew A.

Contributor:

National Bureau of Economic Research.

Skinner, Jonathan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5568.

NBER working paper series no. w5568

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Abandoning the Nest Egg? 401

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

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.

Notes:

Print version record

May 1996.