Do low-income workers benefit from 401(k) plans?

Toder, Eric, and Karen E. Smith. “Do low-income workers benefit from 401(k) plans?”. Issue in Brief 11-15, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, December 2011. http://hdl.handle.net/2345/bc-ir:104682.
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Abstract

The brief's key findings are: (1) Previous studies find that the tax deferral advantage offered by 401(k) plans mainly benefits high-income workers, who face higher marginal tax rates. (2) A key assumption is that employer 401(k) contributions do not affect workers' total compensation -that is, they are fully offset by lower wages. (3) However, our results suggest that additional employer contributions raise total compensation for low-income workers by about 70 to 90 cents per dollar of contribution.

Title
Do low-income workers benefit from 401(k) plans?
Author
Toder, Eric
Smith, Karen E.
Center
Center for Retirement Research
Genre
report
Date Issued
December 2011
Publisher
Center for Retirement Research at Boston College
Series Title
Issue in Brief
Series Number
11-15
Version Identification
Version of record.
Persistent Link
http://hdl.handle.net/2345/bc-ir:104682
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
Financing retirement

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