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The Resource Do Required Minimum Distributions Matter? The Effect of the 2009 Holiday On Retirement Plan Distributions, Jeffrey R. Brown, James Poterba, David Richardson, (electronic resource)

Do Required Minimum Distributions Matter? The Effect of the 2009 Holiday On Retirement Plan Distributions, Jeffrey R. Brown, James Poterba, David Richardson, (electronic resource)

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Summary
This paper investigates how the 2009 one-time suspension of the Required Minimum Distribution (RMD) rules associated with qualified retirement plans affected plan distributions at TIAA-CREF, a large retirement services provider. Using panel data on retirement plan participants at TIAA-CREF, we find that roughly one third of those who were affected by minimum distribution rules discontinued their distributions in 2009. The results also show relatively small differences in the suspension probability between those who had 2008 distributions equal to the RMD amount, and might be classified as facing a binding RMD constraint, and those who were taking distributions in excess of the RMD amount before the distribution holiday. The probability of suspension declines substantially with age and rises modestly with economic resources. We find that individuals taking monthly distributions are less likely to suspend distributions than those taking annual distributions, particularly at higher wealth levels. This pattern is consistent with those who choose monthly distributions being more likely to use their distributions to finance consumption. We supplement these results based on administrative record data on retirement plan participants with survey evidence on participant attitudes that affected decisions about suspending distributions. Our findings provide guidance on the revenue consequences of changing RMD rules and offer insights about the role of various behavioral considerations, such as inertia, in modeling distribution behavior
Language
eng
Work
Instance
Label
Do Required Minimum Distributions Matter? The Effect of the 2009 Holiday On Retirement Plan Distributions
Title
Do Required Minimum Distributions Matter? The Effect of the 2009 Holiday On Retirement Plan Distributions
Statement of responsibility
Jeffrey R. Brown, James Poterba, David Richardson
Creator
Contributor
Subject
Language
eng
Summary
This paper investigates how the 2009 one-time suspension of the Required Minimum Distribution (RMD) rules associated with qualified retirement plans affected plan distributions at TIAA-CREF, a large retirement services provider. Using panel data on retirement plan participants at TIAA-CREF, we find that roughly one third of those who were affected by minimum distribution rules discontinued their distributions in 2009. The results also show relatively small differences in the suspension probability between those who had 2008 distributions equal to the RMD amount, and might be classified as facing a binding RMD constraint, and those who were taking distributions in excess of the RMD amount before the distribution holiday. The probability of suspension declines substantially with age and rises modestly with economic resources. We find that individuals taking monthly distributions are less likely to suspend distributions than those taking annual distributions, particularly at higher wealth levels. This pattern is consistent with those who choose monthly distributions being more likely to use their distributions to finance consumption. We supplement these results based on administrative record data on retirement plan participants with survey evidence on participant attitudes that affected decisions about suspending distributions. Our findings provide guidance on the revenue consequences of changing RMD rules and offer insights about the role of various behavioral considerations, such as inertia, in modeling distribution behavior
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Brown, Jeffrey R
Index
no index present
Literary form
non fiction
Nature of contents
dictionaries
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  • Poterba, James
  • Richardson, David
  • National Bureau of Economic Research
Series statement
NBER working paper series
Series volume
no. w20464
Target audience
specialized
Label
Do Required Minimum Distributions Matter? The Effect of the 2009 Holiday On Retirement Plan Distributions, Jeffrey R. Brown, James Poterba, David Richardson, (electronic resource)
Instantiates
Publication
Note
September 2014
Control code
ssj0001326492
Dimensions
unknown
Form of item
online
Governing access note
Access restricted to subscribing institutions
Specific material designation
remote
System control number
(WaSeSS)ssj0001326492
System details
  • System requirements: Adobe [Acrobat] Reader required for PDF files
  • Mode of access: World Wide Web
Label
Do Required Minimum Distributions Matter? The Effect of the 2009 Holiday On Retirement Plan Distributions, Jeffrey R. Brown, James Poterba, David Richardson, (electronic resource)
Publication
Note
September 2014
Control code
ssj0001326492
Dimensions
unknown
Form of item
online
Governing access note
Access restricted to subscribing institutions
Specific material designation
remote
System control number
(WaSeSS)ssj0001326492
System details
  • System requirements: Adobe [Acrobat] Reader required for PDF files
  • Mode of access: World Wide Web

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