Center for Retirement Research
Center for Retirement Research Working Papers
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TITLE:
Deferring Income in Employer-Sponsored Retirement Plans: The Dynamics of Participant Contributions
AUTHOR(S):
Karen E. Smith
Richard W. Johnson
Leslie A. Muller
DOCUMENT TYPE: Article
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Executive summary
ABSTRACT:
This paper describes contributions to employer-sponsored retirement accounts, using newly available longitudinal data that combine administrative earnings records with survey data. The results reveal a fair amount of individual variability in contribution rates over time. However, potential negative shocks to income and increases in current consumption needs do not appear to lead workers to curtail their contributions. Instead, workers appear to raise their contribution rates after they have achieved key milestones in the lifecourse, such as the birth of a child or the purchase of a home.