Gomes, Francisco, Michaelides, Alexander and Polkovnichenko, Valery (2005) Wealth accumulation and portfolio choice with taxable and tax-deferred accounts. . Centre for Economic Policy Research (Great Britain), London, UK.
Full text not available from this repository.Abstract
We calibrate a life-cycle model with uninsurable labour income risk and borrowing constraints to match wealth accumulation and portfolio allocation profiles of direct and indirect stockholders in both taxable and tax-deferred accounts. Tax-deferred accounts generate an increase in wealth accumulation that is larger for wealthier households. Furthermore, while the cost of following a fixed contribution rate over the life cycle is small, the optimal rate can differ substantially across households, and the welfare losses from choosing the wrong one can be substantial. Finally, the welfare gain from having access to a tax-deferred account ranges from less than 0.1% to 11.5%, depending on the preference parameters.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://www.cepr.org |
| Additional Information: | © 2005 Francisco J. Gomes, Alexander Michaelides and Valery Polkovnichenko |
| Divisions: | Financial Markets Group Economics |
| Subjects: | H Social Sciences > HG Finance |
| JEL classification: | G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice; Investment Decisions |
| Date Deposited: | 04 Jun 2008 16:24 |
| Last Modified: | 15 Sep 2023 23:02 |
| URI: | http://eprints.lse.ac.uk/id/eprint/5362 |
Actions (login required)
 |
View Item |
