The Effects of Income Tax Timing on Retirement Investment Decisions

• 成果类型: Article
• 署名作者: Stinson, Shane R.; Doxey, Marcus M.; Rupert, Timothy J.
• 署名单位: University of Alabama System; University of Alabama Tuscaloosa; Northeastern University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2016-0379
• 发表日期: 2021
• 页码: 435-463
• 关键词: feedback sign; performance; motivation; goals; heuristics

摘要

In an online experiment, the immediate (Roth) versus deferred taxation of retirement income affects taxpayers' investment decisions such that tax-deferred plan investors under-adjust for future tax burdens and overestimate their future wealth compared to Roth investors. When presented with a specific after-tax monetary goal, Roth account holders invest more in higher-risk, higher-return assets than tax-deferred account holders. We investigate four aspects of this investment context that could alleviate these differences: (1) implementing a doyour-best goal, (2) reframing specific goals in pre-tax dollars, (3) explicitly prompting investors to estimate future tax burdens, and (4) providing performance feedback. These interventions reduce differences between Roth and taxdeferred investor behaviors, but do not entirely close the gap on their own. In combination, reframing goals and prompting future tax estimations encourage tax-deferred account holders to invest in risky assets to the same degree as Roth investors only when paired with performance feedback.