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 study assesses the role of Social Security (OASI) and Social Security Disability Insurance, 401(k) plans, unemployment insurance, Medicare, and the federal income tax system in moderating the business cycle in the United States. Using Instrumental Variable (IV) estimation, we demonstrate...

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,...

Today men on average retire at 63 and women at 62, and they can expect to spend 20 years in retirement. But if Americans continue to retire as early as they do today, many will not have adequate income once they stop working. Social Security will provide less relative to pre-retirement earnings...

Today, the average retirement age is 63. If people continue to retire at 63, they are going to face a severe decline in living standards at retirement for a number of reasons. First, at any given retirement age, Social Security benefits will replace less of pre-retirement earnings as the Normal...

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...

We examine 401(k) borrowing since 1992 and identify a puzzle: despite potential gains from borrowing against 401(k) assets instead of from other sources, most eligible households eschew 401(k) loans, including many who carry relatively expensive balances on credit cards and auto loans. We...

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...