Document Type
Article
Publication Date
3-2004
Publication Title
American Economic Review
Department
Department of Economics
Abstract
How has the emergence of defined contribution pensi on plans, such as 401(k) plans, affected the financial security of future retirees? We consider this question using a unique dataset of pension plan formulas for the Surveys of Consumer Finances in 1983 and 1989 and the characteristics of 401(k) plans from the Surveys of Consumer Finances between 1989 and 2001. Our simulations account for uncertainty in earnings and rates of return on stocks and bonds, ownership of company stock, uncertainty in earnings, and heterogeneity in asset choices, plan participation, and job tenure. We find that in the mid-1990s, 401(k) plans were roughly equivalent to defined benefit plans from the 1980s, but by the later 1990s, 401(k) plans dominated defined benefit plans.
DOI
10.1257/000282804322970832
Dartmouth Digital Commons Citation
Samwick, Andrew A. and Skinner, Jonathan, "How Will 401(k) Pension Plans Affect Retirement Income?" (2004). Dartmouth Scholarship. 2403.
https://digitalcommons.dartmouth.edu/facoa/2403