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401

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This paper provides a new econometric specification and new evidence on the impact of 401(k) plans on household wealth. We allow the impact of 401(k)s to vary over both time and earnings groups. Our specification--motivated by a variety of theoretical considerations and data patterns--generalizes earlier work in the literature, and we show that the modeling constraints imposed by previous authors are rejected by the data. Using data from 1987 and 1991 from the Survey of Income and Program Participation, we find that the effects of 401(k)s on household wealth vary significantly by earnings level. Our analysis implies that 401(k)s held by groups with low earnings, who hold a small portion of 401(k) balances, are more likely to represent additions to net wealth than 401(k)s held by high-earning groups, who hold the bulk of 401(k) assets. Overall, between 0 and 30 percent of 401(k) balances represent net additions to private saving in the sample period.

401(k) plans.

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401(k) plans. --- 401(k) plans --- Law and legislation.

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Millions of employees change jobs each year and some leave their savings in their former employers' 401(k) plans. If their accounts are small enough and they do not instruct the plan to do otherwise, plans can transfer their savings into an IRA without their consent. The United States Government Accountability Office examined the implications for 401(k) plan participants of being forced out of plans and into these IRAs. This book examines what happens over time to the savings of participants forced out of their plans; the challenges 401(k) plan participants face keeping track of retirement sav

401(k) plans. --- Pension trusts.

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401(k) plan participants separating from their employers must decide what to do with their plan savings. Many roll over their plan savings to IRAs. As GAO previously reported, there is concern that participants may be encouraged to choose rollovers to IRAs in lieu of options that could be more in their interests. This book identifies challenges separating plan participants may face in implementing rollovers; obtaining clear information about which option to choose; and understanding distribution options.

401(k) plans. --- Retirement --- Planning.