Pre-Retirement Lump-Sum Pension Distributions and Retirement Income Security: Evidence from the Health and Retirement Study

Posted: 6 Aug 2003

See all articles by Gary V. Engelhardt

Gary V. Engelhardt

Syracuse University - Center for Policy Research; Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Abstract

This paper uses the Health and Retirement Study to examine the extent of retirement wealth erosion from pre-retirement lump-sum pension distributions. There is little evidenc ethat spent distributions have resulted in significant pensin leakage. If spent distributions had been rolled over into a tax-qualified plan, they would have represented 5-11 percent of pension and Social Security wealth for the median household that spent a distribution. However, one-quarter of hte households that spent distributions - which is 2.25 percent of all households age 51 to 61 - could have increased retirement wealth by 25 percent or more had the distributions been rolled over.

Suggested Citation

Engelhardt, Gary V., Pre-Retirement Lump-Sum Pension Distributions and Retirement Income Security: Evidence from the Health and Retirement Study. Available at SSRN: https://ssrn.com/abstract=368321

Gary V. Engelhardt (Contact Author)

Syracuse University - Center for Policy Research ( email )

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Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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