Cracking Open the Nest Egg: IRA Withdrawals and Retirement Finance

Smith, Paul A.; Bershadker, Andrew

doi:10.2139/ssrn.968424

Cited by 5 publications

(1 citation statement)

References 18 publications

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“…These withdrawal assumptions may overstate prospective withdrawals and, thereby, understate asset balances at older ages. Bershadker and Smith (2006) report that over 50 percent of current IRA holders who are over seventy made no withdrawals before age seventy. HRS data for 2004 suggest that the percent of IRA holders making withdrawals in the past year ranged from about 5 percent at age fifty-five to 30 percent at age seventy.…”

Section: Withdrawalsmentioning

confidence: 99%

2New Estimates of the Future Path of 401(k) Assets

Poterba

Venti

Wise

2008

Tax Policy and the Economy

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Executive SummaryThe future paths of 401(k) contributions and withdrawals, and the associated path of 401(k) asset values, will affect both the preparation of future retirees for their retirement years and the income tax revenues of federal and state governments. In this paper, we project the future growth of assets in self-directed personal retirement plans, such as 401(k) plans, at age 65 for cohorts attaining that age between now and 2040. We also project the ratio of 401(k) assets at 65 to prior earnings, and the ratio of aggregate 401(k) account balances to GDP. While there is substantial uncertainty in the future path of 401(k) balances, our projections of the future means for these balances suggest that cohorts that attain age 65 in future decades will have accumulated substantially more retirement saving (in real dollars) than current retirement-age cohorts. Our projections also highlight the drag that preretirement withdrawals and management fees place on asset accumulation.

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Section: Withdrawalsmentioning

confidence: 99%