Retirement Savings Inequality: Different Effects of Earnings Shocks, Portfolio Selections, and Employer Contributions by Worker Earnings Level
Social Security Bulletin, Vol. 78, No. 3, 2018
17 Pages Posted: 11 Oct 2018
Date Written: August 8, 2018
Changes in accumulated retirement savings, particularly in employer-sponsored defined contribution (DC) plan balances, differ by worker’s earnings levels. Earnings shocks, portfolio diversification, and employer contributions to worker’s DC plans affect retirement savings for lower earners more than for higher earners. The authors match Survey of Income and Program Participation data to Social Security Administration earnings records and find factors underlying the different retirement savings outcomes by earnings level beyond mere differences in earnings.
Keywords: Defined Contribution Pensions, Retirement Wealth Inequality
JEL Classification: D14, D31, J32
Suggested Citation: Suggested Citation