401(k) Plans and Tax-Deferred Saving
AbstractThis paper examines the role of 40 1(k) plans in retirement saving by U.S. households. It charts the rapid growth of these plans during the 1980s; more than 15 million workers now participate in 401(k)s. Data from the Survey of Income and Program Participation are used to calculate 401(k) eligibility and participation rates by detailed age and income categories. For virtually all groups, 401(k) participation rates conditional on eligibility are much higher than take-up rates for IRAs, suggesting some important differences between these saving vehicles. We consider the interaction between 401(k)s and IRAS, and show that since 1986, only one-fifth of 401(k) contributors have also made IRA contributions. Some 401 (k) eligibles who make limit contributions to their IRAs do not make 401(k) contributions. We also explore whether contributions to 401(k) plans represent "new saving." Comparing the net worth of households that are eligible for 401(k)s with that of households that are not eligible, and comparing the net worth of households that have been eligible for 401(k)s for many years with those who have been eligible for short periods, suggests that 401(k) saving has a negligible effect in displacing other private saving.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4181.
Date of creation: Oct 1992
Date of revision:
Publication status: published as Studies in the Economics of Aging, David A. Wise. ed., University of Chicago Press, 1994, pp. 105-138
Note: PE AG
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Other versions of this item:
- James M. Poterba & Steven F. Venti, 1994. "401(k) Plans and Tax-Deferred Saving," NBER Chapters, National Bureau of Economic Research, Inc, in: Studies in the Economics of Aging, pages 105-142 National Bureau of Economic Research, Inc.
- Poterba, J.M. & Venti, S.F. & Wise, D.A., 1992. "401(k) Plans and Tax-Deferred Savings," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 92-14, Massachusetts Institute of Technology (MIT), Department of Economics.
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel Feenberg & Jonathan Skinner, 1989.
"Sources of IRA Saving,"
NBER Chapters, National Bureau of Economic Research, Inc,
in: Tax Policy and the Economy, Volume 3, pages 25-46
National Bureau of Economic Research, Inc.
- Daniel Feenberg & Jonathan Skinner, 1989. "Sources of IRA Saving," NBER Working Papers, National Bureau of Economic Research, Inc 2845, National Bureau of Economic Research, Inc.
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