From Dow Jones & Company:

A new analysis by two noted economists highlights the failings of current tax incentives for retirement savings. Co-authors Andrew Biggs and Alicia Munnell argue that existing federal tax preferences for retirement plans do not significantly increase the overall amount that families save. Moreover, the pair projects that the cost to the government of these measures will equal 0.9% of GDP in 2020. Data shows that, rather than boosting overall household saving, the subsidies largely induce individuals to switch their savings from taxable to tax-advantaged retirement accounts. In light of these findings, the co-authors suggest curtailing these tax breaks and reallocating the proceeds to fund Social Security, where the benefit is much greater.



Read more: Opinion: Fixing Social Security: Let’s use subsidies for retirement plans