Research on Tax Uncertainty and Savings Diversification Wins TIAA Paul A. Samuelson Award

Originally Published by TIAA.

The TIAA Institute announced that David Brown and Scott Cederburg of the University of Arizona and Michael O’Doherty of the University of Missouri have won the 23rd Annual TIAA Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security. The Samuelson Award recognizes outstanding research that the private and public sectors can use to maintain and enhance Americans’ financial well-being.


The award-winning report, “Tax Uncertainty and Retirement Savings Diversification” investigates optimal savings decisions for investors with access to both traditional and Roth retirement accounts using a model that featured a progressive tax schedule and uncertainty of future tax rates. The study found that an optimal asset allocation for most households involves diversification between traditional and Roth type accounts. This can provide households with additional flexibility in managing their consumption throughout the life cycle and balance risks of structural tax code changes.

“With this research, David Brown, Scott Cederburg and Michael O’Doherty have provided data and analysis that adds new insight to our knowledge of tax uncertainty and savings best practices,” said Stephanie Bell-Rose, Head of the TIAA Institute. “Their conclusions regarding the importance of diversified account types provides clear, tangible advice that will benefit the financial security of everyday Americans.”

“We’re honored to be receiving this award,” said the report’s authors David Brown, Scott Cederburg, and Michael O’Doherty. “We appreciate that the Samuelson Award judges recognized the importance of our research and the insights it reveals into retirement savings best practices, and we hope that financial professionals can use this information to provide more effective advice and guidance to the American public.”

“The authors corroborate some aspects of conventional wisdom, such as the recommendation that individuals with low current income should use Roth accounts,” said John Beshears, one of the Samuelson Award judges. “However, the authors also highlight issues that are often underappreciated, such as the importance of Roth accountseven for high-income individualsas a tool for managing the risk of future changes in the income tax schedule. The paper provides valuable practical guidance that will help individuals better prepare for their financial futures.”

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