To Roth or not to Roth: Taxing retirement plan contributions instead of payouts

Tax-deferred retirement savings plans include independent retirement accounts (IRAs) and employer-sponsored 401(k), 457, and 403(b) plans. These “save now, pay taxes later” plans mean a saver won’t pay income taxes on their contributions. Instead, they pay income taxes when they…

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Addressing Social Security’s Solvency While Promoting High Labor Force Participation

A number of proposals and options to address OASI trust-fund solvency have been suggested in recent years. The present work attempts to examine solvency-promoting reforms from the standpoint of economic efficiency — that is, from the perspective of their effect…

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Understanding Earnings, Labor Supply, and Retirement Decisions

We develop and estimate a model in which individuals make decisions on consumption, human capital investment, labor supply, and retirement. Unlike all previous work, our model allows both an endogenous wage process (which is typically assumed exogenous in the human…

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Adjusting the Payroll Tax to Promote Longer Careers

This paper analyzes a prospective Social Security reform that a number of authors have suggested, namely a payroll tax cut targeted on households near retirement. Our approach uses simulations of a life-cycle model, which we estimate from panel data. The…

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