Liquidity in Retirement Savings Systems: An International Comparison

John Beshears, James Choi, Joshua Hurwitz, David Laibson and Brigitte Madrian
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John Beshears: Harvard University
Joshua Hurwitz: National Bureau of Economic Research

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: What is the socially optimal level of liquidity in a retirement savings system? Liquid retirement savings are desirable because liquidity enables agents to flexibly respond to pre-retirement events that raise the marginal utility of consumption. On the other hand, pre-retirement liquidity is undesirable when it leads to under-saving arising from, for example, planning mistakes or selfcontrol problems. This paper compares the liquidity that six developed economies have built into their employer-based defined contribution (DC) retirement savings systems. We find that all of them, with the sole exception of the United States, have made their DC systems overwhelmingly illiquid before age 55.

Date: 2015-05
New Economics Papers: this item is included in nep-age
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Citations: View citations in EconPapers (26)

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https://research.hks.harvard.edu/publications/getFile.aspx?Id=1197

Related works:
Chapter: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Journal Article: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Working Paper: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Working Paper: Liquidity in Retirement Savings Systems: An International Comparison (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:harjfk:rwp15-024

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