The Impact of 401(k) Plans on Retirement

TitleThe Impact of 401(k) Plans on Retirement
Publication TypeReport
Year of Publication2000
AuthorsFriedberg, L, Webb, A
InstitutionUniversity of California, San Diego
Call Numberwp_2000/Friedberg-Webb11-00.pdf
KeywordsEmployment and Labor Force, Pensions, Retirement Planning and Satisfaction
Abstract

In 1993 38.9 million people were covered by a 401(k) plan, up from 7.1 million in 1983. The rapid growth of 401(k) and other defined contribution pension plans may alter retirement patterns of older workers. Previous research showed that the spread of defined benefit plans, with sharp age-related incentives first discouraging and later encouraging retirement, contributed to the early retirement trend of past decades. Defined contribution plans differ along several dimensions, especially in their smooth rate of pension wealth accrual. We use data from the Health and Retirement Study to show that retirement patterns have begun to change as defined contribution plans have spread. Our estimates indicate that the financial incentives in defined benefit pensions lead people to retire almost two years earlier on average, compared to people with defined contribution plans.

Notes

ProCite field 8 : U VA and NBER; U CA, San Diego

URLhttp://econ.ucsd.edu/papers
Endnote Keywords

Household effects on labor supply/Retirement/Retirement Policies/Nonwage Labor Costs and/Private Pensions/Occupational and Intergenerational Mobility/Promotion/401(k) participation and balances/Pension/Retirement

Endnote ID

1128

Citation Key5403