Portfolio choice in tax-deferred and Roth-type savings accounts
This paper uses numerical methods to compare optimal portfolios in tax-deferred and Roth-type savings accounts. Income and payroll taxes affect optimal portfolios in tax-deferred and Roth-type plans differently. For workers with assets in only one type of plan, the optimal equity share in a tax-deferred account could be higher or lower than in a Roth, depending on initial wealth. The differences in optimal portfolios between plans are large at short investment horizons but smaller at longer horizons. This paper also studies the 'asset location' decision of workers with assets in plans of both types.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: 1 Memorial Drive, Kansas City, MO 64198-0001|
Phone: (816) 881-2254
Web page: http://www.kansascityfed.org/
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
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.:
- Martin Feldstein & Jeffrey B. Liebman, 2001.
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
- Paul A. Samuelson, 2011.
"Lifetime Portfolio Selection by Dynamic Stochastic Programming,"
World Scientific Book Chapters,
in: THE KELLY CAPITAL GROWTH INVESTMENT CRITERION THEORY and PRACTICE, chapter 31, pages 465-472
World Scientific Publishing Co. Pte. Ltd..
- Samuelson, Paul A, 1969. "Lifetime Portfolio Selection by Dynamic Stochastic Programming," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 239-46, August.
- James M. Poterba & John B. Shoven & Clemens Sialm, 2000. "Asset Location for Retirement Savers," NBER Working Papers 7991, National Bureau of Economic Research, Inc.
- John Y. Campbell & Joao F. Cocco & Francisco J. Gomes & Pascal J. Maenhout, 1999.
"Investing Retirement Wealth: A Life-Cycle Model,"
NBER Working Papers
7029, National Bureau of Economic Research, Inc.
- John Y. Campbell & Joao F. Cocco & Francisco J. Gomes & Pascala J. Maenhout, 2000. "Investing Retirement Wealth? A Life-Cycle Model," Harvard Institute of Economic Research Working Papers 1896, Harvard - Institute of Economic Research.
- Burman, Leonard E. & Gale, William G. & Weiner, David, 2001. "The Taxation of Retirement Saving: Choosing Between Front-Loaded and Back-Loaded Options," National Tax Journal, National Tax Association, vol. 54(n. 3), pages 689-702, September.
- Merton, Robert C, 1969. "Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 247-57, August.
- Smetters, Kent, 2002.
"Controlling the cost of minimum benefit guarantees in public pension conversions,"
Journal of Pension Economics and Finance,
Cambridge University Press, vol. 1(01), pages 9-33, March.
- Kent Smetters, 2002. "Controlling the Cost of Minimum Benefit Guarantees in Public Pension Conversions," NBER Working Papers 8732, National Bureau of Economic Research, Inc.
- Jagadeesh Gokhale & Laurence J. Kotlikoff, 2003.
"Who Gets Paid to Save?,"
in: Tax Policy and the Economy, Volume 17, pages 111-140
National Bureau of Economic Research, Inc.
- Shoven, John B. & Sialm, Clemens, 2004.
"Asset location in tax-deferred and conventional savings accounts,"
Journal of Public Economics,
Elsevier, vol. 88(1-2), pages 23-38, January.
- John B. Shoven & Clemens Sialm, 1999. "Asset Location in Tax-Deferred and Conventional Savings Accounts," NBER Working Papers 7192, National Bureau of Economic Research, Inc.
- Zvi Bodie & Robert C. Merton & William F. Samuelson, 1992.
"Labor Supply Flexibility and Portfolio Choice in a Life-Cycle Model,"
NBER Working Papers
3954, National Bureau of Economic Research, Inc.
- Bodie, Zvi & Merton, Robert C. & Samuelson, William F., 1992. "Labor supply flexibility and portfolio choice in a life cycle model," Journal of Economic Dynamics and Control, Elsevier, vol. 16(3-4), pages 427-449.
When requesting a correction, please mention this item's handle: RePEc:fip:fedkrw:rwp03-08. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lu Dayrit)
If references are entirely missing, you can add them using this form.