IDEAS home Printed from https://ideas.repec.org/p/mrr/papers/wp105.html
   My bibliography  Save this paper

Retirement, Saving, Benefit Claiming and Solvency Under A Partial System of Voluntary Personal Accounts

Author

Listed:
  • Alan L. Gustman

    (Dartmouth College and NBER)

  • Thomas L. Steinmeier

    (Texas Tech University)

Abstract

This paper is based on a structural model of retirement and saving, estimated with data for a sample of married men in the Health and Retirement Study. The model simulates how various features of a system of personal Social Security accounts jointly affects retirement, saving, the choice of whether benefits are taken as an annuity or lump sum, taxes paid and the course of benefits with age. Among our findings: Under a system of partial personal accounts, the fraction of 62 year olds at full time work would decline by about 22 percent compared to retirements under the current benefit formula. If the current system were replaced completely by personal accounts, the fraction at full time work would decline by about a third. If all benefits from personal accounts could be taken as a lump sum, the fraction not retired at age 62 would fall by about 5 percentage points compared to a system where there is mandatory annuitization of benefits. Unless annuitization is mandatory, there would be substantial diversion of benefits to age 62, reducing benefits received in one’s 70s and 80s by 20 percent or more.

Suggested Citation

  • Alan L. Gustman & Thomas L. Steinmeier, 2005. "Retirement, Saving, Benefit Claiming and Solvency Under A Partial System of Voluntary Personal Accounts," Working Papers wp105, University of Michigan, Michigan Retirement Research Center.
  • Handle: RePEc:mrr:papers:wp105
    as

    Download full text from publisher

    File URL: http://www.mrrc.isr.umich.edu/publications/Papers/pdf/wp105.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2003. "Optimal Defaults," American Economic Review, American Economic Association, vol. 93(2), pages 180-185, May.
    2. Donna B. Gilleskie & David M. Blau, 2006. "Health insurance and retirement of married couples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 935-953.
    3. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
    4. Alan L. Gustman & Thomas L. Steinmeier, 1998. "Privatizing Social Security: First-Round Effects of a Generic, Voluntary, Privatized U.S. Social Security System," NBER Chapters,in: Privatizing Social Security, pages 313-361 National Bureau of Economic Research, Inc.
    5. Brigitte C. Madrian & Dennis F. Shea, 2001. "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1149-1187.
    6. Martin Feldstein & Andrew Samwick, 1998. "The Transition Path in Privatizing Social Security," NBER Chapters,in: Privatizing Social Security, pages 215-264 National Bureau of Economic Research, Inc.
    7. Alan L. Gustman & Thomas L. Steimeier, 2004. "The Social Security Retirement Earning Test,Retirement and Benefit Claiming," Working Papers wp090, University of Michigan, Michigan Retirement Research Center.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mrr:papers:wp105. 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: (MRRC Administrator) or (Joanne Lustig). General contact details of provider: http://edirc.repec.org/data/isumius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.