Document Type

Working Paper

Publication Date

9-11-2016

SSRN Discipline

Macroeconomics eJournals; PSN Subject Matter eJournals; Political Economy - Comparative eJournals; LSN Subject Matter eJournals; ERN Subject Matter eJournals; Financial Economics Network; SIRN Subject Matter eJournals; Law School Research Papers - Law & Economics; Economics Research Network; Legal Scholarship Network; Public Choice & Political Economy eJournals; Microeconomic Theory eJournals; Social Insurance Research Network; FEN Subject Matter eJournals; Financial Planning Research Network; Law & Society eJournals; Law & Society: Private Law eJournals; FinPlanRN Subject Matter eJournals; Labor eJournals; Political Science Network; Employment, Labor, Compensation & Pension Law eJournals

Abstract

Most Americans will lack the financial resources to be secure and relatively satisfied upon retirement and commentators increasingly recognize that this "retirement crisis" calls for policy changes affecting both active participants in the workforce and retirees Nevertheless some proposed reforms are limited by their exclusion of whole categories of workers or by their privatization of the problem and their reliance on employers' initiative and skill Other proposals have not gained much ground perhaps because they incorporate forms of government contribution or liability that face uphill legislative battles in today's political climatebr brThis Essay sketches a solution the "Shadow 401k" that avoids these issues by creating a universally available and federally administered but not guaranteed matched or credited portable 401k plan and annuity purchase The Shadow 401k builds on existing knowledge in behavioral economics financial literacy and gerontology to provide choice without requiring complicated planning It also responds to recent calls for "portable benefits" plans that are designed with platform economy workers in mind Consequently the Shadow 401k presents an incremental step towards addressing the retirement crisis while also providing a flexible framework for future policy reform

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