Are 401(k) Saving Rates Changing? Cohort/Period Evidence from the Health and Retirement Study

Published: 2007


This research examines the determinants of eligibility and participation in 401(k) plans using two cross-sections of data from the Health and Retirement Study. Our sample consists of workers ages 51-56 representing two cohorts: the original HRS cohort born 1931-41, first interviewed in 1992, and the Early Baby Boomer (EBB) cohort born 1948-53, interviewed in 2004. Participation in 401(k) pensions in the EBB cohort is nearly 50 percent greater than that of the earlier cohort. This substantial growth in 401(k) plan participation over a relatively brief period may reflect intrinsic differences in tastes between the two cohorts, changes over this period in the external environment regarding retirement saving, or the joint effects of both influences.

Key Findings

    • Participation in 401(k) pensions is nearly 50 precent greater among workers born 1948-1953 (early baby boom) compared to workers born 1931-41.
    • This large growth in participation over a short period may reflect differences in saving preferences between the two cohorts, changes over this time in the retirement savings environment, or the joint effect of both.