Tag: leakages
When policymakers consider leakages from 401(k) plans, they must balance two conflicting goals: 1) keeping tax favored savings in the plan so that funds are available at retirement; and allowing access to participants who need their money, which can encourage greater participation and larger contributions. That said, the current setup seems a little crazy.&nbs…
Researchers from the Treasury and Congress’ Joint Committee on Taxation have provided new estimates of how much money “leaks” out of 401(k)s and IRAs based on restricted tax data. It’s a welcome addition to the literature because the existing range of estimates is enormous. Leakages come from three sources – cashouts when participants chang…
