Does the Source of Money Determine Retirement Investment Choices?

17 Pages Posted: 25 Aug 2017

See all articles by Andrea Therese Anthony

Andrea Therese Anthony

Golden Gate University

Kristine Beck

California State University, Northridge

Inga Chira

California State University- Northridge

Date Written: August 23, 2017

Abstract

Using a unique dataset of actual investment choices, we investigate how the investment choices differ between (1) the optional retirement plan (ORP) funded by the employer and (2) the investments in 403(b) accounts funded by employees themselves using voluntary salary reduction. We find that the level of risk associated with voluntary, salary reduction investments in 403(b) accounts is lower than the risk employees are currently taking in their employer funded 401(a) accounts. We also investigate whether the choice of the provider has a significant impact on the asset allocation chosen by the employees.

Keywords: 403(B), Investment Choices, Highly-Educated Individuals, Investment Risk

JEL Classification: D14, G41

Suggested Citation

Anthony, Andrea Therese and Beck, Kristine and Chira, Inga, Does the Source of Money Determine Retirement Investment Choices? (August 23, 2017). Available at SSRN: https://ssrn.com/abstract=3024533 or http://dx.doi.org/10.2139/ssrn.3024533

Andrea Therese Anthony

Golden Gate University ( email )

San Francisco, CA 94105-2968
United States

Kristine Beck

California State University, Northridge ( email )

18111 Nordoff Street
Northridge, CA 91330
United States

Inga Chira (Contact Author)

California State University- Northridge ( email )

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