Target-Date Funds (TDFs) facilitate retirement planning by varying asset allocation over time with the goal of reducing portfolio risk. We explore potential agency problems in TDFs by examining their return performance and flow-performance relation. We find that TDFs under-perform balanced funds...

Many middle-income workers save for retirement through 401(k) plans. This study addresses the concern that low account balances of older workers may indicate that these vehicles are not sufficient to insure adequate retirement savings. In particular, the study shows that workers are not...

Even though they have only existed since 1981, some analysts have concluded that 401(k) plans are a failure. For example, some argue that 401(k) plans are “coming up short” due to, among other factors, the low contribution rates of participants. A recent government report concluded that...

Many workers do not take advantage of savings opportunities provided to them at their workplace, nor do they always make wise investment decisions regarding employer plans. Various automated strategies have been implemented by employers with the objective of increasing retirement plan...

The collapse of Enron, WorldCom, and Global Crossing wiped out much of their employees’ 401(k) savings, which had been heavily invested in employer stock. In response, bills have been proposed in Congress that would give employees the right to sell the employer stock in their 401(k), or that...

This paper investigates two methods for improving participants’ asset allocations in their 401(k) plans: personalized online advice and managed account services. This paper uses a unique new dataset of individual-level administrative data from one 401(k) plan and recommendation data from an...

The present paper analyzes the budgetary, macroeconomic, and welfare effects of tax-deferred retirement saving accounts, similar to U.S. 401(k) plans, in a dynamic general-equilibrium overlapping-generations economy with heterogeneous households. Because of the initial deferral of tax payments,...

Many baby boom era workers, those born between 1946 and 1962, count on various retirement benefits accumulated during their working years to ensure adequate resources as they grow older. A man turning 65 today can expect to live to age 83; a woman to age 85, according to Social Security...

It is typically difficult to determine whether households invest optimally. But sometimes, investment incentives are strong enough to create sharp normative restrictions. We identify employees at seven companies who are eligible to receive employer matching contributions in their 401(k) and can...