Enhancing Retirement Wealth and Reducing Retiree Inequality: Emergency Savings Accounts and Other Policy Options

32 Pages Posted: 31 Oct 2023

See all articles by David John

David John

AARP Public Policy Institute; NASI

Mark Iwry

The Brookings Institution

William G. Gale

Brookings Institution

Date Written: September 2023

Abstract

US retirement savings and household wealth vary widely, and the shortfalls for lower- and moderate-income households and disadvantaged demographic groups could be reduced by automatic enrollment payroll deduction emergency savings, increased retirement savings coverage, an enhanced saver’s tax credit, and simplified portability of accounts. Based on early data, it appears likely that having and using even modest amounts of emergency funds improves household balance sheets over time. And simulations suggest that universal Automatic IRAs – including emergency savings – for workers without employer plans could increase household assets for all age and income groups, especially Blacks and Hispanics.

Keywords: wealth inequality, retirement saving, automatic enrollment

JEL Classification: D14, J26, J32, J71

Suggested Citation

John, David and Iwry, Mark and Gale, William G., Enhancing Retirement Wealth and Reducing Retiree Inequality: Emergency Savings Accounts and Other Policy Options (September 2023). Wharton Pension Research Council Working Paper No. 2023-26, Available at SSRN: https://ssrn.com/abstract=4617849 or http://dx.doi.org/10.2139/ssrn.4617849

David John (Contact Author)

AARP Public Policy Institute ( email )

601 E. Street, NW
Washington, DC 20049
United States
2024343865 (Phone)

NASI ( email )

1776 Massachusetts Avenue, NW
Suite 615
Washington, DC 20036-1904
United States

Mark Iwry

The Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States
3015268028 (Phone)
20854 (Fax)

William G. Gale

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

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