Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

401(K) Savers Aren't Shifting Funds They're Saving More


Economic Trends

401(k) SAVERS AREN'T SHIFTING FUNDS--THEY'RE SAVING MORE

Are so-called 401(k) savings plans a major stimulus for new savings, or do they, as some critics have claimed, merely attract money that would have ended up as savings in some other form? The question is more than academic. Such plans have become the fastest- growing employee benefit, garnering over $50 billion a year in pretax contributions from more than 15 million workers (and their employers, who usually provide some matching funds).

In a new National Bureau of Economic Research study, economists James Poterba, Steven Venti, and David Wise looked at the savings behavior of households with similar characteristics--except for their eligibility to participate in 401(k) plans. They found that 401(k)-eligible households saved just as much outside of their plans as noneligible households, but that their total savings were considerably higher when 401(k) funds were added to the tally.

In short, the evidence strongly suggests that 401(k) plans have significantly boosted private savings.GENE KORETZ


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus