A Cohort Analysis of the Amount in Defined Contribution and Individual Retirement Accounts

DeVaney, S. A. & Zhang,
T. C.. (2001). A cohort analysis of the amount in defined contribution
and individual retirement accounts
Counseling and Planning

Cohort Analysis Of The Amount In Defined Contribution And Individual Retirement

A. DeVaney


Catherine Zhang2

Individual Retirement
Accounts and 401(k) plans were introduced in the 1980s to encourage retirement
saving. The amount saved in these accounts is likely to be affected by
an individual’s age, their cohort, and the economic conditions of the period.
However, there is little research on the effect of age, period, and cohort
on these accounts. To address this gap, six cohorts were developed from
the 1986, 1992, and 1998 Survey of Consumer Finances. The amount in defined
contribution accounts and IRA and Keogh savings increased with age, but
period and cohort effects varied, especially for defined contribution account

Key words: Age effect,
Period effect, Cohort effect, Defined contribution accounts, Individual
Retirement Accounts, Keogh plans

1. Sharon A. DeVaney, Associate Professor, Department of Consumer Sciences
& Retailing, 216 Matthews Hall, Purdue University, West Lafayette,
IN 47907-1262. Phone: 765-494-8300. Fax:  765-494-0869
E-mail: sdevaney@purdue.edu

Tongxiao Catherine Zhang, Ph.D. student in Department of Decision Sciences
and Information Technology, R. H. Smith School of Business, University
of Maryland at College Park, Van Munching Hall, College Park, MD 20742-1815
E-mail: tzhang@rhsmith.umd.edu

study was supported by a grant from the Purdue Research Foundation.