WI20-04: Lost and Found: Claiming Behavior in Abandoned Retirement Accounts
Center for Financial Security
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Many tax-advantaged retirement accounts require individuals to start taking distributions by a certain age (typically 70.5), yet some individuals fail to do so. When this occurs, the unclaimed accounts are often handed over to the state as unclaimed property. Given policy interest in assessing the savings adequacy of older households in the United States, increasing the claim rate of these accounts is a policy priority so that individuals can fully access their own resources. Little is known about the claiming behavior related to these accounts, however. This project will use new data from several years’ worth of state unclaimed and claimed property databases to produce a set of stylized facts and formal regression estimates documenting the patterns and predictors of claiming related to these retirement accounts. We aim to quantify how frequently a retirement savings “mistake” of abandoning an account is mitigated by re-claiming the account; we will also investigate the factors that lead to this behavior. The goal is to inform policymakers as to the extent of this phenomenon (how many retirement accounts become unclaimed and remain unclaimed?) and to describe interventions that can help increase the claiming of abandoned accounts.
This paper builds on prior research finding that in 2016, that Americans held an estimated 70,000 unclaimed retirement accounts, the project examines the claiming patterns of these accounts after they are reported as unclaimed.
Mukherjee, A., & Mommaerts, C. (2020). Lost and Found: Claiming Behavior in Abandoned Retirement Accounts. Retirement & Disability Research Center. https://cfsrdrc.wisc.edu/publications/working-paper/wi20-04.