401(k) investment decisions and Social Security reform

401(k) investment decisions and Social Security reform

401(k) investment decisions and Social Security reform

Uccello

Cori E.

Uccello, Cori E.

Author

Author

text

working paper

Chestnut Hill, Mass. Center for Retirement Research at Boston College20002000monographic

Chestnut Hill, Mass.

Chestnut Hill, Mass.

Center for Retirement Research at Boston College

2000

2000

monographic

Englisheng

English

eng

electronicapplication/pdfborn digital

electronic

application/pdf

born digital

This paper uses the 1995 Survey of Consumer Finances to show that 401(k) participants with an underlying defined benefit plan are more likely to invest in equities than are participants whose 401(k) is their primary plan, suggesting that workers with a guaranteed source of retirement income are more likely to invest their other retirement assets more aggressively. Removing this guarantee might result in more conservative investment. Therefore, using current 401(k) asset allocation behavior to project income under a Social Security individual account system with reduced guaranteed benefits could overstate returns to these accounts, thus overstating their attractiveness relative to the current system.

Cori E. Uccello.

CRR WP2000-4

CRR WP2000-4

CRR WP

2000-4

http://crr.bc.edu/images/stories/Working_Papers/wp_2000-04.pdf

MChBEnglisheng

MChB

Englisheng

English

eng