Can You Contribute to a 401k if You Are Collecting Social Security
In addition to variables such equally age, income, and task tenure, the length of an employee'due south planning horizon is a crucial factor affecting participation in and contribution to a 401(m) plan. On the plan side, the nigh important factors are the availability of matching contributions from the employer and the ability of employees to gain admission to their funds before retirement through borrowing. Expert information near the need for retirement savings and good plan design could significantly increase eligible employees' participation and contributions.
Alicia H. Munnell is Peter F. Drucker Professor of Direction Sciences at Boston College'southward Carroll Schoolhouse of Management and Director of the Middle for Research at Boston College. Annika Sundén is a Research Associate at the Center for Research at Boston College. Catherine Taylor was a graduate educatee in the Economics Department at Boston College and is at present with Charles River Associates.
Acknowledgments: The authors would like to give thanks Daniel Halperin and 3 anonymous reviewers for valuable comments, Kristopher Sarajian for the preliminary work he did on this topic, and Sean Barrett for his able research assistance. The research reported herein was supported in office past the Middle for Retirement Research at Boston College pursuant to a grant from the Social Security Administration funded as part of the Retirement Research Consortium. The opinions and conclusions are solely those of the authors and should not be construed equally representing the opinions or policy of the Social Security Administration, any other agency of the federal authorities, or the Center for Retirement Enquiry at Boston College.
Summary and Introduction
The U.South. retirement income system is often described as a "three-legged stool," consisting of Social Security, employer-provided supplementary pensions, and individual savings. In fact, the stool is pretty wobbly. In 2000, simply half of wage and salary workers in the private sector between the ages of 25 and 64 were covered by a pension plan of any sort. Moreover, the trend is not encouraging: betwixt 1979 and 1999, coverage remained virtually unchanged, even though 1979 marked the cease of a decade of retrenchment and 1999 was the height of the longest expansion in the post-Earth State of war II period (U.S. Census Bureau 1980, 2000).one
At the aforementioned fourth dimension, the nature of pension coverage has changed sharply. The divers contribution plan, in which retirement benefits depend on contributions and the earnings on those contributions, has to a large extent replaced the defined benefit plan, in which benefits are provided every bit a lifetime annuity based on final average salary and years of service (Munnell and Sundén 2001). Within the defined contribution world, the fastest growing type of program is the 401(k). Participation in 401(grand) plans is voluntary, and employees also as employers can make pretax contributions. These characteristics shift a substantial portion of the burden for providing for retirement to the employee: the employee decides whether or not to participate, how much to contribute, and how to invest the assets. Since a growing proportion of workers is covered solely past a 401(k) plan, and since payments from these plans are essential for a comfortable retirement, employees' participation and contribution decisions are extremely important.
The goal with regard to 401(chiliad) plans is to ensure that those who are eligible to participate choose to do so and that those who participate contribute as much as possible. The question is whether policies can alter the attributes of employees or plans to heighten the likelihood of participation and contribution. It is not enough to determine that employees' decisions are related to age, income, and years of schooling, since these factors cannot be easily contradistinct. Rather, one must examine factors that are amenable to change by employers or the government. One important fix of such variables, which has not been covered in previous studies, is individuals' attitudes nigh planning for the future and saving for retirement.
This commodity describes how 401(grand) plans piece of work, briefly summarizes findings from before studies of employee participation in and contributions to such plans, and presents our analysis of how attitudinal variables impact employees' decisions. The analysis is based on data from the 1998 Survey of Consumer Finances (SCF) (Board of Governors of the Federal Reserve System 1998), a resource rich in demographic and financial information on households.
On the employee side, our analysis indicates, the most of import thing affecting participation and contribution decisions is the planning horizon. Employees who plan for periods of less than five years are much less likely to provide for their retirement than those who have a longer perspective. These findings are encouraging, because different wealth, income, or years of schooling, planning horizon is a variable that could be affected by educating employees well-nigh the importance of looking to the future and preparing for retirement. In fact, other studies have suggested that employee educational activity can have a major impact on retirement saving (Bernheim and Garrett 1995; Clark and Schieber 1998). On the plan side, the virtually important determinants are the availability of an employer match and the power of employees to gain access to their funds before retirement through borrowing. In curt, skilful data near the need to save for retirement and good plan blueprint can significantly increase both participation and contributions. The question is whether employers have the incentive to make this attempt nether the new condom harbor nondiscrimination provisions.
How 401(yard) Plans Work
A 401(chiliad) plan is a profit-sharing or stock bonus programme that contains a cash-or-deferred arrangement (CODA). The most prevalent CODA is a bacon reduction agreement.2 Nether such an understanding, eligible employees may elect to reduce their compensation and have their employer contribute the difference to a retirement program. Employers oftentimes match the employee'southward contribution. A typical lucifer is 50 cents for each dollar contributed past the employee, with the lucifer ending when employee contributions equal 6 per centum of bounty.iii Across 6 percent, plans frequently permit employees to make unmatched pretax contributions up to the legislated limit.
Both employee and employer contributions to 401(thousand) plans are tax-deferred. That is, no income taxes are levied on the original contributions or the earnings on those contributions until funds are withdrawn from the plan.4 Because the saving is tax-favored, the Internal Revenue Code (IRC) limits the amount that employees and employers can contribute. For case, constituent employee contributions could not exceed an indexed amount of $10,500 in 2001.5 Some plans allow employees to make after-tax contributions beyond the limit ready for tax-deferred contributions. Total contributions (employee'south pretax, plus employer's pretax, plus employee'south subsequently-tax) were limited in 2001 to the lower of $35,000 or 25 per centum of the participant's compensation.half dozen
Because funds contributed to 401(k) plans receive favorable revenue enhancement treatment, the IRC restricts access to them. Earlier age 59½, an employee can generally withdraw money without penalty simply in instance of disability or death; otherwise, the employee must pay a 10 pct penalty in addition to income taxes. After 59½, an employee may withdraw funds without penalization. Many participants practice have limited access to their funds without penalisation through provisions that let them to borrow the lesser of fifty percent of their holdings or $50,000.7
In add-on to contribution and access limits, 401(chiliad) regulations include nondiscrimination provisions aimed at preventing highly paid workers from benefiting unduly. In particular, the provisions limit the ratio of contributions made by highly paid employees to contributions fabricated by non-highly paid employees.8 Over and above the nondiscrimination provisions applicable to all plans covered by the Employee Retirement Income Security Human activity (ERISA), 401(k) plans have to satisfy an actual deferral percentage (ADP) test. This test can result in an adjustment to the employer's match charge per unit for some participants at the terminate of the year if it turns out that highly paid workers have contributed disproportionately to the plan.9 Recently, the introduction of a so-called prophylactic harbor provision, whereby the existence of an employer lucifer allows a 401(k) plan to qualify automatically, fifty-fifty if no non-highly paid employees take reward of the friction match, has weakened protections for low and moderate earners (Langbein and Wolk 1995).x Under the original nondiscrimination provisions, employers had a strong incentive to brainwash moderate and low earners about the virtues of saving for retirement or, if that failed, to make contributions on the employees' behalf. Nether the new prophylactic harbor provision, employers have nothing to gain from educating reluctant savers and encouraging them to participate; if anything, employers' costs increase when non-highly paid employees cull to participate.
The numbers of 401(yard) plans and participants have grown enormously, for a number of reasons. The plans are more appealing to a younger, more than mobile workforce. For such workers, the greater portability of 401(grand) plans clearly outweighs the predictability of benefits for career employees nether a defined benefit plan. Workers go statements several times a year and can see their balances abound, which makes defined contribution benefits seem more tangible. From the employer's perspective, 401(k) plans may be less costly to operate than divers benefit plans, particularly in the case of small-scale- and medium-sized plans. In addition, 40l(k) plans do not require employers to contribute, although most employers do. Because the plans are fully funded by definition, they eliminate the work associated with funding requirements and pension insurance. Finally, portability can eliminate the need for employers to go along rails of pensions for departed employees.11
Given the popularity and growth of 401(k) plans, ane would have expected them to heave alimony plan coverage in the United States. But, as noted in a higher place, overall pension coverage has remained virtually unchanged. This means that the enormous expansion of defined contribution plans, especially 401(k)-type plans, has produced a abrupt reject in the percentage of the workforce covered under traditional divers do good plans. This refuse reflects shifts in employment from manufacturing to service industries and employers' substitution of defined contribution plans for defined benefit plans. Researchers attribute about one-half of the refuse in defined benefit coverage to employment shifts and one-half to substitution (Ippolito and Thompson 2000; Gustman and Steinmeier 1992).12
Equally a result of the growth of 401(m) plans, the proportion of covered households with merely a divers contribution plan increased from 37 percent in 1992 to 57 percent in 1998 (Chart one). Over the same flow, the proportion with a defined benefit plan dropped from virtually 40 percent to 20 percentage, and the proportion with dual coverage remained unchanged. Because 401(k) plans are becoming the merely pension organisation for more and more households, employee participation and contribution decisions are increasingly of import determinants of retirement saving. What makes employees participate and contribute? What can policy do virtually these issues?
Chart 1.
Households with pension coverage, past plan blazon, 1992, 1995, and 1998
SOURCE: VanDerhei and Copeland (2001), Chart 2.
Before Findings
A handful of studies accept explored the factors that affect participation in and contributions to 401(thou) plans. The studies fall into 2 groups: those based on the 1988 and 1993 Employee Benefit Supplements to the Current Population Survey (CPS) and those based on plan data.13 The advantage of the CPS is that it includes information about both the individual and the program, whereas plan data frequently take limited information almost individual employees. Both employee and plan characteristics are likely to be important determinants of participation and contribution decisions.
On the individual side, the obvious variables for participation and contribution decisions are income, age, schooling, job tenure, and taste for saving. Income is an important determinant of participation. Low-income employees are more likely than high-income employees to be liquidity constrained (that is, to need their money for immediate purposes) and therefore less likely to invest in a pension plan, which severely limits or prohibits access to money until retirement. Depression-income employees are also subject to lower tax rates and therefore do good less from the tax-deferred nature of 401(k) plans. Finally, low-income workers experience college replacement rates from Social Security and therefore accept less need for additional retirement income to maintain their preretirement standard of living. The relationship between income and contributions is more than complicated, since employee contributions are limited to a stock-still dollar amount, as discussed above.
Age is an important gene because information technology indicates an employee's stage in the life cycle and may bear on his or her interest in retirement saving. More advanced schooling would probably enhance employees' understanding of both the advantages of 401(m) plans and the need to accrue funds for retirement. Job tenure determines the vesting of employer contributions and may bear upon employees' noesis almost the plan. Finally, some people just like to save more others, so whatever variable that captures a taste for saving would also exist positively related to both participation and contributions.
On the plan side, the presence of an employer match in the 401(grand) plan would exist expected to encourage both participation and contributions because information technology produces a large initial render on employees' contributions and supplements the advantages of taxation deferral. Given some employer match, the relationship between the size of the match and employee contributions depends on whether the income or substitution effect dominates. Employee contributions may decrease considering workers need to contribute less to achieve their original contribution level (the income result). On the other hand, employees may increment contributions because for each dollar they contribute they will receive more than ane dollar in total contributions (the substitution effect).
Another important plan characteristic is giving employees some access to their funds before retirement without penalty. Employees who are liquidity constrained are less likely than others to participate in pension plans (Curme and Fifty-fifty 1995). If they can borrow against the assets in their 401(k) program, they would be more than likely to participate considering they know they can get at least some of their money should they need it.
The presence of another pension plan may also affect participation, although information technology is unclear whether the effect is positive or negative. On the one manus, Ippolito (1994) argues that individuals with low disbelieve rates and a sense of taste for saving are more than likely to cull jobs that offering pensions. If this is true, the presence of more than one pension plan signals that workers employed in the firm have a taste for saving, and the relation between the defined benefit programme and participation in and contributions to the 401(k) plan should be positive. On the other hand, the workers may be target savers. In that case, if the original pension plan provided sufficient income replacement for them to reach their savings target, they would exist less likely to participate in the 401(k) plan.fourteen This issue can only be resolved empirically.
Studies Based on the CPS and Other Surveys of Individuals
Andrews (1992) used the May 1988 CPS to estimate iii equations: the probability of an employee'southward being covered by a 401(k) program, the probability of a covered employee'southward participating in the programme, and the per centum of the employee's salary contributed. She relied on workplace characteristics to explicate coverage and institute that the probability of coverage increases with firm size, unionization, wage level, so on. But coverage is only part of the story. In 1988, roughly 43 percent of workers who were offered 401(k) plans did not participate. To explain participation, Andrews used both private and plan characteristics and plant that participation rises with historic period, income, pedagogy, task tenure, and the presence of an employer match. Regarding contributions, she found that increasing age, family income, and participation in an individual retirement business relationship (IRA) are of import positive determinants but that the presence of an employer match is negatively related to contributions.
The Employee Benefit Research Plant (1994) compared the May 1988 CPS and the April 1993 CPS. Betwixt 1988 and 1993, the proportion of workers employed by firms with 401(k) plans increased from 27 percent to 37 percent, and the percentage of workers offered 401(k) plans who did non participate dropped from 43 percent to 35 percent. Looking at sponsorship and participation rates by age, earnings, sex, and hours worked reveals that participation in plans with an employer match is slightly higher (78 pct) than participation in plans without a match (72 percentage). Participation rates rise with age until about 50, and so reject. As in Andrews's study, the percentage of earnings contributed is lower in plans with an employer match than in plans without 1.
A Federal Reserve Bank of New York study also used the April 1993 CPS to analyze participation in 401(thou) plans (Bassett, Fleming, and Rodrigues 1998). Information technology constitute that participation is positively related to income, age, job tenure, and dwelling buying. Participation is sharply higher when the 401(k) plan is the only retirement plan offered by the employer. On the program side, the study found that the presence of an employer match significantly increases participation. The April CPS as well contains detailed measures of match rates that enable researchers to examination whether participation increases when employers offer higher matches; the study institute no evidence to support such an increase in participation.
Using data from a nationally representative sample of ii,000 people aged 30 to 48 taken past Merrill Lynch in 1994, Bernheim and Garrett (1996) assessed the effects of employer-based data programs on participation in and contributions to retirement plans.15 The authors related participation rates to standard economic characteristics (age, employee's wage, and education), the presence of another plan, and 2 measures of employer-provided advisory programs--whether the employer offers information nearly retirement planning and whether the employee uses it. They discovered that the employee'southward wage has a positive effect, the presence of another plan has a negative effect, and age and education are statistically insignificant. The most of import determinant of participation is employer-provided informational materials: the participation rates of employees who utilize these materials are significantly higher than those of employees who do non receive or use such materials. The authors employed a similar model to explain contributions and over again found that the effects of employer-provided information are large and highly significant.16
Studies Based on Plan Data
Papke (1995) used Department of Labor Form 5500 data for 1986 and 1987 to estimate participation and contribution rates. She related the participation ratio (the number of active employees divided by the number eligible to participate) to several friction match-rate variables. She found that participation is positively related to the presence of an employer match only that the marginal upshot of moving to a higher match is minor. Fifty-fifty those minor marginal furnishings disappeared when Papke estimated a fixed-effects model. The implication of these findings is that participation rates are affected more by the efforts of the benefits staff and the quality of their communications than by employers' match rates. Finally, Papke used the aforementioned model to examine employee contributions. She institute that contributions increase with friction match rates up to eighty percent of the employee'due south contribution but that the marginal effect of increasing match rates above x percent is small, by and large insignificant, and often negative. Plans with lucifer rates in excess of eighty per centum have lower employee contributions than plans with no employer lucifer at all.
Using 1986 and 1990 survey data from 43 firms, Papke and Poterba (1995) related the proportion of eligible employees participating in 401(k) plans to the employer'southward lucifer rate, the availability of an alternative program, and plan size. They found that participation is college when employers match employee contributions and saw some prove that participation increases with the match rate. The link between employee contributions and match rates is much weaker.
Another study examined employee participation and contributions amid 12,000 salaried and nonunion hourly workers in a medium-sized manufacturing firm between 1988 and 1991 (Kusko, Poterba, and Wilcox 1998). During this period, the employer's match increased from 25 percentage of the kickoff 6 percent of employee compensation to over 100 per centum, and then disappeared entirely in the concluding year. That substantial variation in the match rate produced near no change in the participation rate of employees over the iv-year menses and had only a small, albeit significant, effect on contributions. Most participants were bunched at one of three constraints--the maximum plan limit of x pct of compensation, the maximum employee contribution eligible for an employer match (6 pct of compensation), or the Internal Revenue Service's limit on employee contributions ($seven,313 in 1988 to $8,475 in 1991)--and rarely changed their contributions to reflect changes in the employer'south match.
Clark and Schieber (1998) examined 1994 administrative records for xix firms, including data on employee wages, age, contribution rates, match rates, and the beingness and generosity of a divers benefit plan. The authors related participation rates to individual and plan characteristics, to the extent of communication regarding the plan, and to different lucifer rates, since all plans in the sample provided some friction match. They plant that higher friction match rates increase participation in 401(k) plans, but they were unable to examination the outcome of some match versus no match. They also found that increasing the quality of communication significantly increases participation rates. College replacement rates in a divers benefit plan tend to reduce participation, just the impact is small. The authors used the same model to explain employee contributions and over again found that increased employer match rates and communications take a positive effect.
The Country of the Debate
To engagement, the story is as follows. The CPS studies ostend that participation and contributions are related positively to income, age, education, and chore tenure.17 The prove also suggests that participation and contributions are negatively related to the presence and generosity of a divers do good programme. None of the studies has a comprehensive measure of household wealth or any measure of a taste for saving.
All of the studies advise that employees respond positively to the presence of an employer match. At that place is no consensus, however, every bit to whether employees respond to the size of the friction match. Kusko, Poterba, and Wilcox (1998) found picayune change in either participation or contributions in response to large changes in employer matches over time. Bassett, Fleming, and Rodrigues (1998) uncovered no testify that participation rises with the lucifer rate. Papke (1995) showed that participation increases with the match rate, with smaller marginal effects at higher match rates; moreover, contributions increment markedly when employers offering a match, though the effect on contributions was negative at very high match rates. Papke and Poterba (1995) concluded that participation increases with the match rate, but they found no significant issue on contributions. Clark and Schieber (1998) observed a positive effect of the match charge per unit on both participation and contributions, but their sample contained no firms without a match rate.18
Results of an Empirical Study
This report uses a unlike data ready, the 1998 Survey of Consumer Finances (SCF), to explore the relationship between individual and programme characteristics and employees' decisions to participate in and contribute to 401(k) plans. The SCF is a triennial survey sponsored by the Federal Reserve Board in cooperation with Statistics of Income of the Department of the Treasury. The SCF collects detailed information on households' assets, liabilities, and demographic characteristics, as well as on pension coverage, participation, and alimony plan characteristics.19 It provides much more data about individuals than other studies do, specifically with regard to workers' attitudes toward saving and to nonpension avails owned by covered workers or by others in their family.
Most information in the SCF is collected at the household level; however, information on pension coverage, employment, and other demographic characteristics are available for both the head of the household and the spouse or partner. In our analysis, we employ person-specific data obtained by considering each person in a married couple as a separate observation. Variables collected at the household level, such as financial wealth, are attributed to both individuals, since each member of a married couple can draw on shared finances. These data permit usa to analyze participation and contribution decisions in 401(grand) plans based on both individual and household characteristics. While the 1998 SCF covers iv,299 households, our sample consists of 1,698 non-self-employed individuals eligible to participate in a 401(chiliad)-type plan. The means of the variables used in our analysis are shown in Table 1. Persons eligible to participate in 401(chiliad) plans in the SCF are a relatively well-off group, with an average income of $66,100 and a net worth of $221,700. Still, 28 percent of those eligible chose not to participate in the 401(k) plan offered by their employer.
| Variable | Weighted ways | |
|---|---|---|
| Eligible for savings program (N = one,698) | Participates in savings plan (North = 1,229) | |
| Age | 40.96 | 41.45 |
| Years of education | xiii.85 | xiii.96 |
| Job tenure (years) | 9.37 | 10.14 |
| Short planning horizon | 0.53 | 0.49 |
| Income (dollars) | 66,100 | 71,700 |
| Cyberspace worth (dollars) | 221,700 | 251,700 |
| Has DB pension | 0.23 | 0.20 |
| DB pension wealtha (dollars) | 86,900 | 84,700 |
| Employer contributes | . . . | 0.82 |
| Employer match charge per unit | . . . | 0.62 |
| 0 to 0.49 | . . . | 0.31 |
| 0.v to 1.0 | . . . | 0.26 |
| More than 1.0 | . . . | 0.thirteen |
| Can borrow | . . . | 0.85 |
| Respondent participates in tax-deferred savings plan | 0.72 | 1.00 |
| Percentage of earnings respondent contributes to plan | . . . | six.42 |
| SOURCE: Authors' calculations using the Federal Reserve'due south 1998 Survey of Consumer Finances. | ||
| Notation: DB = defined benefit; . . . = not applicable. | ||
| a. For those with a defined do good plan. | ||
Although the SCF provides information on wealth and tastes not available elsewhere, it suffers from lack of data about 401(k) plans offered to employees who choose not to participate in them. Therefore, our participation equation does not include data almost the availability and level of employer matches or the potential for admission to retirement funds. Nevertheless, since the SCF does provide programme data for those who participate in 401(k) plans, our contribution equation tin can include program data likewise as individual characteristics.
The Participation Equation
The first chore is to estimate the probability that workers who are eligible to participate in a 401(g) plan will join the programme. The dependent variable has a value of one if a worker participates in the 401(k) programme and a value of zilch if the worker elects not to participate. The explanatory variables include those used in earlier studies (age, income, education, and task tenure) plus three new ones--household net worth, the present discounted value of future benefits in the private's defined benefit plan, and the individual's planning horizon.
The relation betwixt internet worth and participation in a 401(k) program could be positive or negative. If workers accept a taste for saving, loftier net worth would be positively related to participation. On the other hand, if workers are target savers, high cyberspace worth could exist negatively related to participation. The 2nd new variable, defined benefit pension wealth, is expected to exist negatively related to participation. Theoretically either a positive or negative issue is possible, simply previous studies have institute a negative human relationship between participation and the presence of a defined benefit plan. That is, workers who conceptualize that their defined do good plan will provide adequate retirement income will exist less probable to participate in a 2d plan.
To provide a mensurate of a respondent's planning horizon, the SCF asks the following question: "In planning your family's saving and spending, which of the time periods listed on this page is virtually important to y'all?" The possible responses are "next few months," "next year," "next few years," and "side by side five to ten years."20 We incorporated a respondent's planning horizon into our analysis by creating an indicator variable that equals 1 if the respondent picks any flow of less than 5 years. A curt planning horizon is probable to exist associated with a lower taste for saving and a smaller probability of participating in a pension plan. Previous studies have reported a positive human relationship between planning and saving. For instance, in a recent commodity based on the Wellness and Retirement Study, Lusardi (1999) found that those who had thought a lot near retirement had more wealth, all else beingness equal, than those who had not thought almost retirement.
The participation equation was estimated using a multivariate probit (see Table 2). The values reported in Table 2 represent the change in the probability of participation from a one-unit modify in a continuous variable evaluated at the mean or the shift in a dichotomous variable from nothing to one. For instance, if job tenure increases past 1 yr from the mean (9 years), the probability of participating increases by 0.7 percentage point.
| Variable | Equation 1 | Equation 2 | OLS of Equation 1 | |||
|---|---|---|---|---|---|---|
| Marginal effects | t-statistic | Marginal furnishings | t-statistic | Coefficient | t-statistic | |
| Historic period | ||||||
| 25-34 | 0.137 | two.72 | 0.138 | ii.74 | 0.198 | 3.01 |
| 35-44 | 0.170 | three.26 | 0.170 | iii.27 | 0.230 | iii.l |
| 45 or older | 0.113 | i.96 | 0.114 | one.99 | 0.164 | 2.42 |
| Log of income | 0.040 | 3.23 | 0.040 | 3.21 | 0.033 | ii.76 |
| Job tenure | 0.007 | 4.00 | 0.007 | 4.09 | 0.006 | iv.27 |
| Years of instruction | 0.005 | 0.94 | 0.005 | 0.87 | 0.005 | 0.83 |
| Log of net worth | 0.022 | 2.83 | 0.022 | 2.78 | 0.020 | 2.51 |
| Has DB pension | -0.108 | -ii.58 | -0.109 | -2.61 | -0.105 | -2.48 |
| Log of DB pension wealth | -0.012 | -three.41 | -0.012 | -three.45 | -0.010 | -2.94 |
| Brusk planning horizon | -0.088 | -3.83 | . . . | . . . | -0.083 | -iii.75 |
| Planning horizon | ||||||
| Next few months | . . . | . . . | -0.064 | -0.18 | . . . | . . . |
| Next year | . . . | . . . | -0.052 | -2.88 | . . . | . . . |
| Next few years | . . . | . . . | Omitted | . . . | . . . | . . . |
| five to 10 years | . . . | . . . | 0.062 | two.15 | . . . | . . . |
| Longer than 10 years | . . . | . . . | 0.090 | 1.31 | . . . | . . . |
| Constant | . . . | . . . | . . . | . . . | 0.095 | 0.69 |
| Pseudo-Rtwo | 0.103 | 0.105 | 0.113 | |||
| SOURCE: Authors' calculations based on the Federal Reserve Board's 1998 Survey of Consumer Finances. | ||||||
| NOTES: Number of observations is 1,698. | ||||||
| OLS = ordinary least squares; DB = defined benefit plan; . . . = not applicable. | ||||||
Overall, the results confirm earlier findings that age, income, and job tenure increase the probability of participating in a 401(k) plan. Teaching is not statistically significant, a issue that holds regardless of how the educational activity variable is specified. Age has a large affect. An eligible worker between the ages of 25 and 34 has a xiv per centum greater probability of participating in a 401(1000) plan than a counterpart nether age 25, and the probability increases for workers aged 35 to 44. Interestingly, for workers anile 45 and over, the probability of participation is only 11 pct greater than for workers under 25. Income has a more modest event. Translating the touch back into dollars, the results point that if household income rises $10,000 higher up the mean (from $66,100 to $76,100), participation would ascension by 0.6 pct point. Job tenure has a statistically pregnant bear on; equally noted earlier, one additional year of tenure raises the probability of participation by 0.vii percentage point.
The new variables--cyberspace worth, alimony wealth, and planning horizon--all take statistically pregnant effects. Cyberspace worth exerts a modest positive upshot on the participation decision: increasing net worth by $10,000 from the mean raises participation by 0.1 per centum point. Nevertheless, the finding supports the notion that workers with a sense of taste for saving are more than likely to participate in a pension plan.21 Being covered by a defined benefit plan reduces the probability of participating in a 401(1000) plan by eleven pct. The amount of pension wealth, however, has only a small negative consequence on the probability of participation.22 Finally, having a short planning horizon dramatically decreases the probability of participation--by almost nine pct points.
Since the planning horizon variable turns out to be quite important statistically and potentially important in terms of affecting participation, it is useful to take a closer expect at how it is specified. In Equation 2, the planning horizon is expressed as a split indicator variable for each category with the "adjacent few years" every bit the omitted variable. The results support the specification of planning horizon in Equation one. Workers with planning horizons of the next few years or shorter are less likely to participate in a 401(thousand) plan than workers with horizons of v to 10 years and 10 years or more. The question is whether planning horizon affects contributions too as participation.
The Contribution Equation
The contribution equation attempts to explain the percentage of income that those who choose to participate contribute to a plan. This equation includes nearly of the variables described above plus three program characteristics--the existence of an employer friction match, the size of that match, and whether workers can infringe confronting the plan.23 The existence of an employer friction match should have a positive effect. As discussed earlier, the evidence to date is mixed regarding the impact of match charge per unit. Theoretically, it could have a positive or negative effect on employee contributions, depending on whether the substitution or income effect dominates. Access to funds before retirement would clearly be expected to have a positive effect on contributions.24
The results of the contribution equation are presented in Table 3. Since the equation includes programme information as well as private characteristics, information technology explains a substantial amount of the variation in contribution rates across employees. Moreover, the effects are straightforward to interpret since the equation is estimated using ordinary least squares (OLS).
| Variable | Equation ane | Equation two | Equation 3 | |||
|---|---|---|---|---|---|---|
| Coefficient | t-statistic | Coefficient | t-statistic | Coefficient | t-statistic | |
| Age | ||||||
| 25-34 | -0.164 | -0.23 | -0.543 | -0.81 | -0.578 | -0.88 |
| 35-44 | 0.216 | 0.thirty | -0.098 | -0.15 | -0.133 | -0.20 |
| 45 or older | -0.060 | -0.08 | -0.254 | -0.36 | -0.339 | -0.49 |
| Log of income | -0.499 | -1.87 | -0.429 | -i.94 | -0.420 | -1.89 |
| Years of education | 0.045 | 0.64 | 0.064 | ane.01 | 0.071 | 1.12 |
| Log of net worth | 0.600 | 4.27 | 0.520 | 4.38 | 0.535 | 4.53 |
| Has DB pension | -0.057 | -0.ten | -0.465 | -0.87 | -0.498 | -0.93 |
| Log of DB alimony wealth | 0.032 | 0.63 | 0.069 | one.43 | 0.073 | 1.51 |
| Employer contributes | 0.707 | i.69 | . . . | . . . | . . . | . . . |
| Employer has match rate | -0.515 | -3.36 | . . . | . . . | . . . | . . . |
| Lucifer rate | ||||||
| 0 to 0.49 | . . . | . . . | 4.533 | 11.73 | iv.518 | 11.72 |
| 0.v to ane.0 | . . . | . . . | two.009 | 5.97 | 2.003 | 5.97 |
| More 1.0 | . . . | . . . | 1.508 | 3.04 | i.479 | 2.99 |
| Can borrow | 2.619 | 6.30 | i.712 | 4.59 | 1.779 | 4.78 |
| Short planning horizon | -1.182 | -3.78 | . . . | . . . | -1.122 | -iii.84 |
| Planning horizon | ||||||
| Adjacent few months | . . . | . . . | -0.371 | -0.79 | . . . | . . . |
| Next year | . . . | . . . | -0.894 | -2.22 | . . . | . . . |
| Next few years | . . . | . . . | Omitted | . . . | ||
| 5 to 10 years | . . . | . . . | 0.646 | i.72 | . . . | . . . |
| Longer than ten years | . . . | . . . | 1.170 | 2.75 | . . . | . . . |
| Constant | 7.976 | 2.93 | 5.440 | 2.36 | six.061 | 2.61 |
| Rii | 0.098 | 0.206 | 0.203 | |||
| SOURCE: Authors' calculations based on the Federal Reserve Board's 1998 Survey of Consumer Finances. | ||||||
| NOTES: Number of observations is ane,229. DB = defined benefit plan; . . . = non applicable. | ||||||
Many of the private variables that were of import in the participation decision appear not to affect the contribution rate. For instance, historic period, the presence of a defined benefit program, and the wealth in that plan are no longer statistically meaning, and didactics remains insignificant. In contrast, a short planning horizon continues to have a statistically significant and important event: a planning horizon of less than five years reduces the contribution rate by roughly 1.two percentage points. The contribution rate is positively related to wealth, which again suggests that the variable reflects a taste for saving. Household income has a statistically significant negative consequence. This can be explained by the $ten,000 limit on employee contributions in 1998, which essentially forced the contribution rate to decline as income rose higher up the limit.
Plan variables are disquisitional to the contribution decision. The ability to borrow increases the contribution rate by 2.6 percentage points, and the presence of an employer match increases information technology by 0.seven pct point. As some earlier studies suggest, the size of an employer lucifer does not appear to encourage further contributions once the friction match exists. In fact, a larger match negatively affects employee contributions. This effect, though statistically significant, is small. If the friction match goes from 40 per centum to 80 pct, the employee contribution rate would pass up by simply 0.2 of i percent signal. The negative human relationship is confirmed by the results shown in Equation iii (Tabular array three).
Determination
Our results support earlier findings and add to the debate, in particular by documenting the importance of an individual's planning horizon in participation and contribution decisions. On the plan side, our results confirm speculation past many economists that admission to funds is an important determinant of employees' contribution rate.
The question for policymakers and employers is why people have different planning horizons and what tin can be done to lengthen those horizons. A short planning horizon would be rational if individuals planned to piece of work their entire life or expected to die at an early age. Alternatively, a brusk planning horizon could result from misinformation, such every bit the assumption that Social Security will provide adequate retirement income. To the extent that short planning horizons are based on misinformation, giving employees accurate data nearly typical piece of work patterns, life expectancies, and expected Social Security benefits could brand them more forward-looking in their planning.
In terms of the implications for policy, the results of this analysis are encouraging. If participation and contribution rates were related solely to income and age, so little could be done to change them. Just they appear to be related to planning horizon on the individual side and to the existence of a match rate and access to funds on the programme side. Individuals' horizons tin be extended past information about the importance of planning for retirement. In fact, studies by Bernheim (1998) and Clark and Schieber (1998) suggest that employer-provided information tin be very important. Similarly, employers can meliorate the appeal of their plans by matching employee contributions and allowing employees to borrow funds. These changes should ameliorate both participation and contributions, thereby enhancing pension coverage and ensuring that more Americans are prepared for retirement.
The question is whether employers volition encourage moderate and low earners to salve for retirement. Equally noted before, employers had a strong incentive to do so under the original 401(k) nondiscrimination provisions, but the safe harbor provision contains no such incentives. One can only hope that employers will undertake employee teaching initiatives even without an incentive to do so.
Appendix: Structure of Defined Benefit Pension Wealth
Divers benefit alimony wealth is the present discounted value of payments from defined benefit pension plans. For respondents currently working, the SCF asks how much they expect to receive from their divers benefit plan and the age at which they await to start receiving benefits. The benefit data is reported in one of ii means: as dollar amounts or as a percent of final pay. When a dollar corporeality is reported, the almanac corporeality of expected benefits is used to calculate a present value. When the expected benefit is reported every bit a percentage of terminal pay, final wages are estimated by assuming a nominal wage growth of 5 per centum per year (the intermediate assumption of the 2001 Social Security Trustees' Study). The replacement rate is practical to the terminal wage at the age when the person expects to commencement collecting benefits, resulting in an annual amount that can be used to summate present discounted value. For people who are currently receiving pension benefits, current annual benefits are used. Respondents also report the amount they look to receive from pensions from previous jobs. In such cases, the annual benefit is computed from the information provided past the respondent.
To compute the present discounted value, the expected value of the almanac benefit is calculated for each twelvemonth from retirement age until the age at which the probability of being alive is nil (usually around age 119). The expected value is the annual benefit multiplied past the sex activity-specific probability that the person is still alive. The calculation assumes that anybody reaches retirement with certainty and that afterward retirement the survival probability for a given twelvemonth is conditional on surviving to the previous yr.25
The expected value of the annual benefit is discounted to 1998, using the nominal interest rate. The Trustees' intermediate supposition for futurity nominal interest rate is 6.3 percent. The nowadays discounted value of defined benefit payments is the sum of the annual benefits. Post-obit Gustman and Steinmeier (1998), the discounted value is prorated to reflect the fact that the worker has non yet finished working. For case, a respondent who is 40 years old, who started working at the current job at historic period xx, and who expects to work there until age lx has completed 50 percent of his or her career; the present discounted value in this instance is multiplied past 0.five. Pensions that are currently being received or that are from previous jobs are not prorated since the respondent has completed his or her career at the job from which the alimony is derived.
Notes
1. Coverage data come from the Current Population Survey, which measures coverage for individual workers at one point in time. Pension coverage is more extensive when considered over workers' lifetimes and on a household, rather than an individual, basis. Nevertheless, a meaning portion of households reach retirement with no pension benefits at all.
ii. 401(k)-blazon plans had existed for decades, only they were clearly authorized in the Revenue Act of 1978, which ended whatever ambivalence surrounding their condition. They became popular and spread afterwards the Internal Revenue Service (IRS) proposed clarifying regulations in 1981 that allowed the use of salary reduction arrangements every bit a source of 401(k) programme contributions.
iii. The trend to limit the proportion on which the lucifer is based (the employee's basic contribution) to six percent reflects the IRS requirement that employers with basic rates above 6 percent show that they are not discriminatory (McGill and others 1996, 279). The notion is that low- and middle-income workers would be difficult-pressed to contribute more than half dozen percent of their earnings to a alimony.
4. Non all taxes are deferred, however. As a upshot of the 1983 Social Security Amendments, payroll taxes are levied on employee contributions to 401(thousand) plans.
5. Under the Economic Growth and Taxation Relief Reconciliation Act of 2001, salary reduction deferral limits for 401(chiliad), 403(b), and 457 plans increase to $11,000 in 2002, $12,000 in 2003, $13,000 in 2004, $14,000 in 2005, and $xv,000 in 2006.
Thereafter, the limits rising in line with the consumer price alphabetize in $500 increments.
6. For the purpose of this calculation, compensation cannot exceed a specified limit ($170,000 in 2001). Nether the Economic Growth and Tax Relief Reconciliation Human activity of 2001, the contribution limit increases to $twoscore,000 in 2002 and in line with the consumer cost index thereafter, and the annual bounty limit increases from $170,000 to $200,000 and is indexed in $5,000 increments thereafter.
7. The General Accounting Office (1997) reports that approximately one-half of all 401(k) plans offer loans and that the proportion offering loans increases with programme size. Mitchell (1999) found that 51 per centum of 401(k) plans and 32 percent of profit-sharing plans immune loans in 1997. VanDerhei and others (1999) report that 90 percent of large 401(m) plans let loans.
eight. In 2000, highly compensated workers included 5 percent owners and persons with salaries over $85,000.
9. Nether the ADP exam, elective contributions are not discriminatory if the 401(yard) plan satisfies one of two criteria: (1) the average ADP for highly compensated employees is not more than 125 percent of that for non-highly compensated employees (that is, if the deferral for the non-highly compensated is x percent and that for the highly compensated does not exceed 12.five per centum, the plan passes the first examination); (2) the boilerplate ADP for the highly compensated is not more than twice the average deferral for the non-highly compensated, and the difference between the percentages is not more than 2 percent (that is, if the ADP is 2 per centum for the non-highly compensated and 4 percent for the highly compensated, the plan satisfies the 2d exam).
10. Rubber harbor provisions were introduced as function of the pension simplification provisions of the Small Business Job Protection Deed of 1996 and became effective in 1999.
11. Many employees leave accounts behind when they move to another task, requiring the former employer to pay some tape-keeping fees. This authoritative burden may help explain the trend toward lump-sum payments in defined do good every bit well as defined contribution plans.
12. Nearly employer substitution of defined contribution plans for defined do good plans occurred in the late 1980s and 1990s. Before 1986, a large number of 401(k) plans were converted thrift plans, which had typically supplemented defined benefit plans simply allowed merely after-tax employee contributions. Engen, Gale, and Scholz (1996) argue that even past 1991, a large portion of 401(k) assets was in plans originating before 1982. Between 1985 and 1992, even so, Papke (1999) plant that about 20 percent of ongoing sponsors dropped defined benefit plans entirely in favor of divers contribution plans and that they replaced traditional defined contribution plans with 401(k) plans. Papke may overstate the rate of exchange slightly since she does not accept into account programme mergers and changes in plan identification numbers (Ippolito and Thompson 2000). All the same, both substitution and increased employment in the service industry explain why coverage nether 401(grand) plans has not increased.
thirteen. The CPS interviews roughly l,000 households each month, primarily about labor force activity, to approximate the unemployment rate. Each March, the survey includes supplemental economical and demographic questions and questions about income and employment during the previous twelvemonth. Respondents are asked whether whatsoever employer for whom they worked in the previous twelvemonth had a pension or other type of retirement plan for any of its workers. Those who answer "yeah" to this question are asked whether they were included in the plan. Consistent March CPS data are available since 1979. In add-on to the March data, the Agency of Labor Statistics (BLS) has conducted supplementary surveys on employee benefits in April 1972; in May 1979, 1983, and 1988; and in April 1993. Although the BLS has no electric current plans to repeat those surveys, questions on health and retirement benefits were included in CPS supplements on workers in contingent and culling employment arrangements conducted in Feb 1995, 1997, and 1999.
fourteen. A recent study confirmed that the framing of the participation choice, equally well as specific plan characteristics, has an important result on the extent to which employees elect to bring together. Madrian and Shea (2000) establish that participation increased sharply when a company introduced automatic enrollment, forcing employees to opt out if they did non want to participate.
15. See Bernheim (1998) for a survey of employees' financial sophistication and other evidence regarding the impact of employer-provided education.
16. It is possible that workers with a sense of taste for saving are more likely to take part in educational programs, but the authors (Bernheim and Garrett 1996) have found that educational programs tend to be offered more frequently in situations where employees are predisposed confronting saving. Moreover, participation in educational programs does not appear to be related to a taste for saving.
17. Even and Macpherson (2000) point out that single men are particularly unlikely to participate in 401(grand) plans.
18. In addition to the studies discussed above, two recent publications, neither of which focuses on participation and contribution decisions, study findings on the effect of the match rate. Clark and others (2000) found a positive upshot of the match rate on participation and a negative effect on contributions. VanDerhei, Copeland, and Quick (2000) note in a draft report that the match rate has a negative effect on contributions.
xix. Kennickell, Starr-McCluer, and Surette (2000) describe the 1998 SCF in item.
20. Planning horizons of respondents to the 1998 SCF are equally follows (in percent):
| Participation equation sample | Contribution equation sample | |
|---|---|---|
| Next few months | xv.1 | 13.five |
| Next year | 10.8 | nine.3 |
| Adjacent few years | 27.1 | 25.9 |
| Next v to 10 years | 27.3 | 29.three |
| Longer than 10 years | nineteen.7 | 22.2 |
21. Studies have suggested that having an IRA may signal a taste for saving (encounter Engen, Gale, and Scholz 1996 for an overview), since it is another vehicle that households could utilise for retirement savings. Still, recent data on IRAs betoken that most of the flow into such accounts comes not from new contributions but from rollovers from previous pension plans and the investment returns on those rollovers. Hence, the presence of an IRA but indicates that an private had a pension plan in the past, non that he or she has a taste for saving (Copeland 2001).
22. The fact that a spouse has a pension plan could also affect the decision to participate in a 401(m) plan. However, including a variable for spousal pension coverage in our assay produced no significant effect on the determination to participate.
23. The match rate in this practise is the ratio of employer's contribution to employee'due south contribution. Thus, if a respondent contributes 2 per centum of his or her salary to the plan and the employer contributes 1 percent, the program friction match rate is estimated to exist 0.five. The SCF does not provide data almost whether the plan has an explicit match or whether the employer contributes a set amount regardless of the employee'due south contribution. The calculated match rate is the all-time one can do given the limitations of the data, but results should be interpreted with caution.
24. Of grade, if employees borrow and fail to repay the loan, they will lose retirement protection.
25. These probabilities come from http://demog.berkeley.edu/~jrw/.
References
Andrews, Emily Due south. 1992. "The Growth and Distribution of 401(k) Plans." In Trends in Pensions 1992, edited by John Turner and Daniel Beller. Washington, D.C.: U.S. Section of Labor.
Bassett, William F.; Michael J. Fleming; and Anthony P. Rodrigues. 1998. "How Workers Use 401(thousand) Plans: The Participation, Contribution, and Withdrawal Decisions." Federal Reserve Bank of New York Staff Report, No. 38 (March).
Bernheim, B. Douglas. 1998. "Financial Illiteracy, Education, and Retirement Saving." In Living with Defined Contribution Pensions, edited by Olivia S. Mitchell and Sylvester J. Schieber. Philadelphia, Pa.: Pension Research Council and the Academy of Pennsylvania Press, pp. 38-68.
Bernheim, B. Douglas, and Daniel M. Garrett. 1996. "The Determinants and Consequences of Financial Didactics in the Workplace: Evidence from a Survey of Households." NBER Working Paper No. 5667. Cambridge, Mass.: National Agency of Economical Research.
Board of Governors of the Federal Reserve Organisation. 1998. Survey of Consumer Finances. Washington, D.C.
Board of Trustees of the Federal Sometime-Age and Survivors Insurance and Disability Insurance Trust Funds. 2001 Annual Study. Washington, D.C.: U.S. Government Press Office.
Clark, Robert L.; Gordon P. Goodfellow; Sylvester J. Schieber; and Drew A. Warwick. 2000. "Making the Well-nigh of 401(g) Plans: Who's Choosing What and Why." In Forecasting Retirement Needs and Retirement Wealth, edited by Olivia S. Mitchell, P. Brett Hammond, and Anna M. Rappaport. Philadelphia, Pa.: Pension Research Council and the University of Pennsylvania Press, pp. 95-138.
Clark, Robert L., and Sylvester J. Schieber. 1998. "Factors Affecting Participation Rates and Contribution Levels in 401(1000) Plans." In Living with Defined Contribution Pensions, edited by Olivia Southward. Mitchell and Sylvester J. Schieber. Philadelphia, Pa.: Pension Inquiry Council and the University of Pennsylvania Press, pp. 69-97.
Copeland, Craig. 2001. "IRA Assets Go on to Grow." EBRI Notes (January). Washington, D.C.: Employment Benefit Research Institute.
Curme, Michael A., and William E. Fifty-fifty. 1995. "Pension Coverage and Borrowing Constraints." Periodical of Human Resources 30(4): 700-712.
Employee Benefit Enquiry Institute. 1994. Salary Reduction Plans and Individual Saving for Retirement. EBRI Issue Cursory No. 155 (November). Washington, D.C.: Employment Benefit Research Institute.
Engen, Eric One thousand.; William Gale; and John Karl Scholz. 1996. "The Illusory Furnishings of Saving Incentives on Saving." Journal of Economical Perspectives x(four): 113-138.
Fifty-fifty, William E., and David A. Macpherson. 2000. "The Changing Distribution of Pension Coverage." Industrial Relations 39(2): 199-227.
Gustman, Alan, and Thomas Steinmeier. 1992. "The Stampede Toward Defined Contribution Pension Plans: Fact or Fiction?" Industrial Relations 31(2): 361-369.
__________. 1998. Effects of Pensions on Savings: Analysis with Data from the Health and Retirement Written report. NBER Working Newspaper No. 6681. Cambridge, Mass.: National Bureau of Economical Inquiry.
Ippolito, Richard A. 1994. "Pensions and Indenture Premia." Journal of Homo Resources 29(3): 795-812.
Ippolito, Richard A, and John W. Thompson. 2000. "The Survival Charge per unit of Defined-Benefit Plans, 1987-1995." Industrial Relations 34(2): 218-241.
Kennickell, Arthur B.; Martha Starr-McCluer; and Brian J. Surette. 2000. "Contempo Changes in U.S. Family Finances: Results from the 1998 Survey of Consumer Finances." Federal Reserve Bulletin 86(1): 1-29.
Kusko, Andrea L.; James M. Poterba; and David Due west. Wilcox. 1998. "Employee Decisions with Respect to 401(grand) Plans." In Living with Divers Contribution Pensions, edited past Olivia S. Mitchell and Sylvester J. Schieber. Philadelphia, Pa.: Alimony Research Council and the University of Pennsylvania Press, pp. 98-112.
Langbein, John H., and Bruce A. Wolk, eds. 1995. Pension and Employee Do good Law, 3rd ed. Westbury, N.Y.: Foundation Press.
Lusardi, Annamaria. 1999. "Information, Expectations, and Saving for Retirement." In Behavioral Dimensions of Retirement Economics, edited past Henry J. Aaron. Washington, D.C.: Brookings Institution Printing and the Russell Sage Foundation.
McGill, Dan M.; Kyle N. Brown; John J. Haley; and Sylvester J. Schieber. 1996. Fundamentals of Individual Pensions. Philadelphia, Pa.: Pension Research Council and the University of Pennsylvania Press.
Madrian, Brigitte C., and Dennis F. Shea. 2000. "The Power of Proposition: Inertia in 401(thou) Participation and Savings Behavior." NBER Working Paper No. 7682. Cambridge, Mass.: National Bureau of Economic Research.
Mitchell, Olivia. 1999. New Trends in Pension Do good and Retirement Provisions. NBER Working Paper No. 7381. Cambridge, Mass.: National Bureau of Economic Research.
Munnell, Alicia H., and Annika Sundén. 2001. "Private Pensions: Coverage and Benefit Trends." Paper prepared for Conversation on Coverage, Washington, D.C., July 24-25, 2001.
Papke, Leslie E. 1999. "Are 401(k) Plans Replacing Other Employer-Provided Pensions? Show from Console Data." Periodical of Human Resources 34(2): 346-368.
__________. 1995. "Participation in and Contributions to 401(1000) Plans: Prove from Plan Data." Periodical of Human Resources thirty(2): 311-325.
Papke, Leslie Eastward., and James Thou. Poterba. 1995. "Survey of Testify on Employer Match Rates and Employee Saving Beliefs in 401(g) Plans." Economic Letters 49: 313-317.
U.South. Census Bureau. 2000. Current Population Survey, March Supplement. Washington, D.C.: Census Bureau.
__________. 1980. Current Population Survey, March Supplement. Washington, D.C.: Demography Agency.
U.S. General Bookkeeping Role (GAO). 1999. 401(k) Plans: Loan Provisions Enhance Participation Simply May Affect Income Security for Some. Washington, D.C.: GAO. October.
VanDerhei, Jack, and Craig Copeland. 2001. The Irresolute Face of Individual Retirement Plans. EBRI Effect Brief No. 232 (April). Washington, D.C.: Employment Benefit Research Constitute.
VanDerhei, Jack; Craig Copeland; and Ballad Quick. 2000. "A Behavioral Model for Predicting Employee Contributions to 401(m) Plans: Preliminary Results." Newspaper prepared for Retirement 2000: A Multi-Disciplinary Symposium, Washington, D.C., February 24, 2000.
VanDerhei, Jack; Russell Galer; Carol Quick; and John Rea. 1999. 401(k) Plan Asset Allotment, Account Balances, and Loan Activity. EBRI Issue Brief No. 205 (January). Washington, D.C.: Employment Benefit Research Establish.
Source: https://www.ssa.gov/policy/docs/ssb/v64n3/v64n3p64.html
0 Response to "Can You Contribute to a 401k if You Are Collecting Social Security"
Post a Comment