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Beyond the Storm: New Reforms for 401(k) Plans

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Publication Date: June 2009

Publisher(s): Tax Policy Center

Author(s): Benjamin H. Harris; Lina Walker

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Economics (Economic theory)

Keywords: Federal Budgets & Fiscal Policy; Retirement/Pensions; Taxes and Social Programs; Fiscal future

Type: Paper


The financial crisis has provoked calls for a fundamental reform of the nation's retirement saving structure. This article argues that rather than dismantle the existing system, policymakers should build on existing reforms and expand the automatic 401(k) to help eligible workers save more and make better investment decisions. In addition, retirees should be given the opportunity to test-drive annuity products to realize the benefits of receiving stable retirement income, and near-retirees should be provided the option of incrementally purchasing annuity units over time to help mitigate the risk associated with varying interest rates.