•   •   •   •

Download the Paper (90 K, PDF file) - November 1, 2000 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
In 1993 38.9 million people were covered by a 401(k) plan, up from 7.1 million in 1983. The rapid growth of 401(k) and other defined contribution pension plans may alter retirement patterns of older workers. Previous research showed that the spread of defined benefit plans, with sharp age-related incentives first discouraging and later encouraging retirement, contributed to the early retirement trend of past decades. Defined contribution plans differ along several dimensions, especially in their smooth rate of pension wealth accrual. We use data from the Health and Retirement Study to show that retirement patterns have begun to change as defined contribution plans have spread. Our estimates indicate that the financial incentives in defined benefit pensions lead people to retire almost two years earlier on average, compared to people with defined contribution plans.

SUGGESTED CITATION:
Leora Friedberg and anthony webb, "The Impact of 401(k) Plans on Retirement" (November 1, 2000). Department of Economics, UCSD. Paper 2000-30.
http://repositories.cdlib.org/ucsdecon/2000-30