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Brief

Small Retirement Accounts: Issues and Options

J. Mark Iwry, Christopher Pulliam, William G. Gale, David C. John
September 21, 2021
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Abstract

The existence of small and inactive accounts is a largely inevitable feature of the US retirement saving system, which features employer-based retirement plans, individually managed accounts, and automatic enrollment. We consider the issues raised by these accounts, including the corrosive effects of fees, and the increased likelihood of pre-retirement leakage and lost accounts. We examine five sets of partial solutions: extensive reform of the rollover and account consolidation rules; enhancement of the saver’s credit; a national retirement dashboard; a default account consolidator; and creating a system with a single account for each worker. Each idea has advantages and drawbacks. Policy makers should consider these options as they contemplate reform.

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Individual Taxes
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Meet the Experts

  • J. Mark Iwry
  • Christopher Pulliam
    Research Analyst, Brookings Institution
  • William G. Gale
    Codirector
  • David C. John
Research report

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March 30, 2022
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