Set it and Forget it? Financing Retirement in an Age of Defaults

Lucas Goodman, Anita Mukherjee () and Shanthi Ramnath
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Anita Mukherjee: https://business.wisc.edu/directory/profile/anita-mukherjee/

No WP 2022-50, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: Retirement savings abandonment is a rising concern connected to defined contribution systems and default enrollment. We use tax data on Individual Retirement Accounts (IRAs) to establish that for a recent cohort, 0.4% of retirement-age individuals abandoned an aggregate of $66 million, proxied by a failure to claim over ten years after a legal requirement to do so. Analysis of state unclaimed property databases suggests that workplace defined contribution plans are abandoned at a higher rate than IRAs. Finally, regression discontinuity estimates show that certain accounts created by default enrollment are at higher risk of abandonment by passive savers.

Keywords: escheatment; defaults; retirement savings (search for similar items in EconPapers)
JEL-codes: D83 H24 H31 J14 J32 J63 (search for similar items in EconPapers)
Pages: 64
Date: 2022-10-19
New Economics Papers: this item is included in nep-age, nep-hea and nep-rmg
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