Tag: 401ks
The brief’s key findings are: Previous studies find that the tax deferral advantage offered by 401(k) plans mainly benefits high-income workers, who face higher marginal tax rates. A key assumption is that employer 401(k) contributions do not affect workers’ total compensation – that is, they are fully offset by lower wages. However, our results suggest…
Abstract Economists frequently assume that employees “pay for” employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. Because low-income employees receive little tax benefit from saving in qualified retirement plans, however, and may prefer immediate consumption to additional retirement accruals, they may not be willing to accept a on…
