|Pre-Retirement Lump-Sum Pension Distributions and Retirement Income Security: Evidence from the Health and Retirement Study
|Year of Publication
|National Tax Journal
|Methodology, Net Worth and Assets, Pensions
This paper uses the Health and Retirement Study to examine the extent of retirement wealth erosion from pre-retirement lump-sum pension distributions. There is little evidence that spent distributions have resulted in significant pension leakage. If spent distributions had been rolled over into a tax-qualified plan, they would have represented 5-11 percent of pension and Social Security wealth for the median household that spent a distribution. However, one-quarter of the households that spent distributions--which is 2.25 percent of all households age 51 to 61--could have increased retirement wealth by 25 percent or more had the distributions been rolled over.
Retirement Wealth/Pensions/Models, Theoretical