How Much Do Respondents In The Health And Retirement Study Know About Their Tax-Deferred Contribution Plans? A Crosscohort Comparison

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Executive Summary

The authors use information from Social Security earnings records to examine the accuracy of survey responses regarding participation in tax-deferred pension plans. As employer-provided defined benefit pensions are replaced by voluntary contribution plans, employees' understanding of the link between their annual contribution decisions and their post-retirement wealth is becoming increasingly important. They examine the extent to which wage-earners in the Health and Retirement Study correctly report their inclusion in tax-deferred contribution plans and, conditional on inclusion, their annual contributions. They use two samples representing different cohorts in two different periods: the original HRS cohort interviewed in 1992 at ages 51-61, and a combination of the War Babies and Early Baby Boomer cohorts at the same ages interviewed twelve years later.

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