000			02664cam a22003737 4500
001			w12502
003			NBER
005			20211020112225.0
006			m o d
007			cr cnu||||||||
008			210910s2006 mau fo 000 0 eng d
100	1		_aAmromin, Gene. _928194
245	1	4	_aThe Tradeoff Between Mortgage Prepayments and Tax-Deferred Retirement Savings / _cGene Amromin, Jennifer Huang, Clemens Sialm.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2006.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w12502
500			_aAugust 2006.
520	3		_aWe show that a significant number of households can perform a tax arbitrage by cutting back on their additional mortgage payments and increasing their contributions to tax-deferred accounts (TDA). Using data from the Survey of Consumer Finances, we show that about 38% of U.S. households that are accelerating their mortgage payments instead of saving in tax-deferred accounts are making the wrong choice. For these households, reallocating their savings can yield a mean benefit of 11 to 17 cents per dollar, depending on the choice of investment assets in the TDA. In the aggregate, these mis-allocated savings are costing U.S. households as much as 1.5 billion dollars per year. Finally, we show empirically that this inefficient behavior is unlikely to be driven by liquidity considerations and that self-reported debt aversion and risk aversion variables explain to some extent the preference for paying off debt obligations early and hence the propensity to forgo our proposed tax arbitrage.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aG11 - Portfolio Choice • Investment Decisions _2Journal of Economic Literature class.
690		7	_aG18 - Government Policy and Regulation _2Journal of Economic Literature class.
690		7	_aH24 - Personal Income and Other Nonbusiness Taxes and Subsidies _2Journal of Economic Literature class.
690		7	_aH31 - Household _2Journal of Economic Literature class.
700	1		_aHuang, Jennifer. _928195
700	1		_aSialm, Clemens. _920719
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w12502.
856	4	0	_uhttps://www.nber.org/papers/w12502
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w12502
942			_2ddc _cW-PAPER
999			_c335640 _d294202