Filtern
Erscheinungsjahr
- 2021 (2) (entfernen)
Dokumenttyp
Sprache
- Englisch (2)
Volltext vorhanden
- ja (2)
Gehört zur Bibliographie
- nein (2)
Schlagworte
- 401(k) plan (1)
- Aging (1)
- Financial advice (1)
- Financial literacy (1)
- Financial management (1)
- household finance (1)
- life cycle saving (1)
- retirement (1)
- tax policy (1)
Do required minimum distribution 401(k) rules matter, and for whom? Insights from a lifecylce model
(2021)
Tax-qualified vehicles helped U.S. private-sector workers accumulate $25Tr in retirement assets. An often-overlooked important institutional feature shaping decumulations from these retirement plans is the “Required Minimum Distribution” (RMD) regulation, requiring retirees to withdraw a minimum fraction from their retirement accounts or pay excise taxes on withdrawal shortfalls. Our calibrated lifecycle model measures the impact of RMD rules on financial behavior of heterogeneous households during their worklives and retirement. We show that proposed reforms to delay or eliminate the RMD rules should have little effects on consumption profiles but more impact on withdrawals and tax payments for households with bequest motives.
We investigate how financial literacy shapes older Americans’ demand for financial advice. Using an experimental module fielded in the Health and Retirement Study, we show that financial literacy strongly improves the quality but not the quantity of financial advice sought. In particular, more financially literate people seek financial help from professionals. This effect is more pronounced among older people and those with more wealth and more complex financial positions. Our analysis result implies that financial literacy and financial advisory services are complementary with, rather than substitutes for, each other.