What Does the Market Crash Mean for the Ability of 401(k) Plans to Provide Retirement Income?
AbstractDeteriorating financial market conditions in 2008 intensified the debate over the ability of 401(k) plans to provide retirement income. This paper simulates the effects of the market crash of 2008 for 401(k) plan participants of various ages, earnings levels, and portfolios. Because Social Security is such an important component of retirement income, focusing solely on 401(k) balances can overstate the effect of the market crash. Most workers with low to moderate earnings are projected to have only moderate reductions in retirement income. In many cases the change in retirement income would be more than offset by working an additional year.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 62 (2009)
Issue (Month): 3 (September Citation: 62 National Tax Journal 455-76 (September 2009))
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- Chai, Jingjing & Maurer, Raimond H. & Mitchell, Olivia S. & Rogalla, Ralph, 2011.
"Lifecycle impacts of the financial and economic crisis on household optimal consumption, portfolio choice, and labor supply,"
CFS Working Paper Series
2011/23, Center for Financial Studies (CFS).
- Jingjing Chai & Raimond Maurer & Olivia S. Mitchell & Ralph Rogalla, 2011. "Lifecycle Impacts of the Financial and Economic Crisis on Household Optimal Consumption, Portfolio Choice, and Labor Supply," Working Papers wp246, University of Michigan, Michigan Retirement Research Center.
- Jingjing Chai & Raimond Maurer & Olivia S. Mitchell & Ralph Rogalla, 2011. "Lifecycle Impacts of the Financial and Economic Crisis on Household Optimal Consumption, Portfolio Choice, and Labor Supply," NBER Working Papers 17134, National Bureau of Economic Research, Inc.
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