Tag: 401k drawdown
Employers, academics, and policymakers all recognize that drawdown is the major challenge facing the 401(k) system. Participants face the risk of spending their money too quickly and exhausting their assets or hoarding their balances and depriving themselves of necessities. My view is that reluctance to spend is the greater threat for three reasons. First, peo…
Hoarding retirement savings is a risk. At a recent conference, retirement experts concluded that the lack of an easy drawdown mechanism in 401(k) plans was the major challenge facing the 401(k) system. In 2014, the Treasury Department and the IRS issued guidance that made longevity annuities accessible to 401(k) plans and that enabled target dat…
