The majority of retirement savings is invested in cor-porate equity, attracted by the historically high average returns offered by stocks. But substantial risk also accompanies investments in stocks, a risk that seems especially costly after the recent financial crisis. Not only did the value of...

More than half of households’ retirement savings are invested in stocks. During the recent financial crisis, stocks lost more than one-half their market value from the fall of 2007 to their lows in the spring of 2009. Since the trough in the market, stock prices have risen to nearly 85 percent...

This study calculates the impact of federal income taxes on the progressivity of the Old Age and Survivors Insurance (OASI) program. It uses the Health and Retirement Study (HRS) data linked with the Social Security Earnings Records to estimate OASI contributions and benefits for individuals and...

A substantial literature has developed models of optimal consumption and asset allocation based on the assumption that stocks and bonds have fixed returns, with normal independent, identically distributed disturbances. Households optimally rebalance from stocks to bonds as they age, reflecting...

Beginning this year, people can convert all or a portion of their traditional IRA balances into Roth IRAs. Although this new allowance for conversions applies explicitly to traditional IRAs, it also applies indirectly to balances in 401(k) plans that workers hold with former employers. These old...

Despite the recovery of the stock market since the financial crisis, many retirees have seen significant reductions in their wealth relative to pre crisis expectations and substantial declines in investment income due to very low short-term interest rates. What really matters, though, is the...

As the role of 401(k) and similar defined-contribution plans continues to expand in our retirement system, plan participants are paying more of the cost of financing their retirement income. This study analyzes the trading costs and fees of the 100 largest domestic equity mutual funds held in...

The maturation of the 401(k) system and the enactment of the Pension Protection Act of 2006, which made 401(k) plans easier and more automatic, were expected to enhance the role that 401(k)s played in the provision of retirement income. So, originally, the release of the Federal Reserve’s 2007...

With the decline in privately and publicly guaranteed benefits for pensions and health care, people increasingly must finance a greater share of their retirement expenses through their own savings. The relatively high long-term return on equity makes investments in stocks seem both an attractive...

Increasingly, employers who provide their employees with a retirement plan are relying on 401(k) and similar defined contribution plans instead of defined benefit plans. As a result, participants are paying more of the cost of managing their pension plans, which can take a substantial toll on...