Recent legislative proposals have included restoring Individual Retirement Accounts (IRAs) to their pre-1987 eligibility rules. Whether IRAs are simply tax windfalls with no effect on saving, or whether IRAs stimulate saving, is a crucial issue in evaluating the effectiveness of such proposals....

Many observers believe current aging baby boomers are woefully unprepared for retirement. Others raise the prospect that Americans are saving too much for retirement. This paper attempts to reconcile these contrasting views using a simple life cycle model and a more sophisticated retirement...