Tag: 401(k)
Introduction Employer plans are a critical component of the U.S. retirement income system. The existence of these plans, especially the increasingly dominant 401(k)s, seems highly dependent on their favorable tax treatment. It is less clear, however, whether the employee contributions that fund these plans are a response to the favorable tax provisions or to t…
Abstract This paper examines portfolio choice, trading behavior, and realized rates of return following a panel of nearly seven thousand 401(k) retirement accounts during the April 1994-August 1998 time period. The distribution of equity allocations in the panel is strongly bi-modal: 48% of the average annual equity allocations in the panel are zero, while 22%…
