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How Would 401(k) 'Rothification' Alter Saving, Retirement Security, and Inequality?
[report]
2019
unpublished
The US has long incentivized retirement saving in 401(k) and similar retirement accounts by permitting workers to defer taxes on contributions, levying them instead when retirees withdraw funds in retirement. This paper develops a dynamic life cycle model to show how and whether 'Rothification' -that is, taxing 401(k) contributions rather than payouts -would alter household saving, investment, and Social Security claiming patterns. We show that these changes differ importantly for low-versus
doi:10.3386/w26437
fatcat:uxwbibg6n5bkbjdqtfycv64hfi