Liquidity in Retirement Savings Systems: An International Comparison

John Beshears, James Choi, Joshua Hurwitz, David Laibson and Brigitte Madrian

No 21168, NBER Working Papers from National Bureau of Economic Research, Inc

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 self-control 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.

JEL-codes: D14 F61 H3 H31 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-age and nep-pbe
Note: AG IFM
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Citations: View citations in EconPapers (26)

Published as John Beshears & James J. Choi & Joshua Hurwitz & David Laibson & Brigitte C. Madrian, 2015. "Liquidity in Retirement Savings Systems: An International Comparison," American Economic Review, American Economic Association, vol. 105(5), pages 420-25, May.
Published as Liquidity in Retirement Savings Systems: An International Comparison , John Beshears, James J. Choi, Joshua Hurwitz, David Laibson, Brigitte C. Madrian. in Insights in the Economics of Aging , Wise. 2017

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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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