TDRAW_AMT Background

In the 2019 and 2020 SIPP, TDRAW_AMT was added as a follow-up to ERET_LUMPSUM.  Its purpose was to capture unreported retirement income among select respondents. It lists the amount of lump sum or regular distribution payments received from an IRA, Keogh, 401(k), 403(b), 503(b), thrift plan, defined-benefit pension, and/or cash balance plan.

ERET_LUMPSUM asks, “Between January 1st and the end of December [of the reference year], did … receive any lump sum or regular distribution payments from any of … retirement accounts [i.e., (1) an IRA or Keogh account, (2) 401(k), 403(b), 503(b), or thrift plan, or (3) defined-benefit pension or cash balance plan]?”

Respondents can report one of the following:

1.     Yes, lump sum

2.     Yes, regular distribution

3.     Yes, both a lump sum and regular distribution

4.     No, no payments received

TDRAW_AMT then asks, “How much income did … receive (from any of … retirement accounts)?”

Retirement Income in the SIPP

With the addition of TDRAW_AMT, respondents can report retirement income in three variables:
(1) TLMPAMT: In ELMPTYP1YN, all respondents aged at least 15, were asked whether they received a lump sum payment from a pension or retirement plan during the reference period. If they did, the amount was reported in TLMPAMT, which sums total lump sum payments from a pension or retirement plan, severance pay, a deferred payment or final paycheck, or another source.
(2) TRET1AMT-TRET8AMT: In ERETANY, respondents that were retired or had ever been retired during the reference period were asked whether they received retirement income at any time during the year. If they report having received retirement income, they were asked to report up to eight types of pension income in ERETTYP1YN-ERETTYP8YN (e.g., retirement income from a Federal civil service or other Federal civilian employee pension or Military retirement pay). Monthly amounts for each type of pension income were recorded in TRET1AMT-TRET8AMT.
(3) TDRAW_AMT: The universe for TDRAW_AMT is ‘ERETANY not equal 1 and [ERET_LUMPSUM=2 or (ERET_LUMPSUM in (1,3) and ELMPTYP1YN not equal 1]’.
ERET_LUMPSUM is asked of respondents aged at least 59 in December of the reference year who owned an IRA, Keogh, 401(k), 403(b), 503(b), thrift plan, defined-benefit pension, and/or cash balance plan. In ERET_LUMPSUM, respondents report whether they received (1) a lump sum payment, (2) a regular distribution, (3) both a lump sum payment and regular distribution, or (4) neither. If respondents report receiving retirement income in ERET_LUMPSUM and either (a) had never been retired or (b) had been retired but did not report receiving retirement income in ERETANY, they were asked to report the amount in TDRAW_AMT.
Respondents that report receiving a lump sum payment from a retirement plan in both ELMPTYP1YN and ERET_LUMPSUM were excluded from the universe of TDRAW_AMT to avoid double-counting retirement income (which would otherwise be reported in both TLMPAMT and TDRAW_AMT). Instead, if ERET_LUMPSUM in (1,3) and ELMPTYP1YN=1, lump sum payments from retirement accounts were recorded in TLMPAMT only.

Creating a Retirement Income Recode

Data users can create a monthly retirement income recode variable by summing the reported monthly amounts received by an individual from the following sources: pension income, retirement account income, and life insurance benefits.

Income from paid-out life insurance policies (TLIFE_AMT), lump sum withdrawals from pensions and retirement plans (TLMPAMT), and income from retirement accounts (TDRAW_AMT) were reported at the year-level in the SIPP. To construct a person-month level retirement income recode, these variables were divided by 12 and added to the monthly pension income variables.

For each month for respondents 15 and over (TAGE_EHC>=15), calculate the following:

• XDRAW_AMT = TDRAW_AMT/12
• XLIFE_AMT = TLIFE_AMT/12
• If ELMPTYP1YN=1 and TLMPAMT>=TROLLAMT, 
          set XLMPAMT = (TLMPAMT – TROLLAMT)/12
  Else set XLMPAMT = 0

To create the retirement income recode, sum TRET1AMT, TRET2AMT, TRET3AMT, TRET4AMT, TRET5AMT, TRET6AMT, TRET7AMT, TRET8AMT, XDRAW_AMT, XLIFE_AMT, and XLMPAMT.

Respondents may also report income received from disability or survivor provisions of a pension or other retirement plan. This monthly income is captured by TDIS1AMT-TDIS10AMT and TSUR1AMT-TSUR13AMT and can be included in the retirement income recode at the data user’s discretion.

Additional notes:

• TLMPAMT may include other types of lump sum payments from severance pay, a deferred payment or final paycheck, or another source if ELMPTYP2YN=1 or ELMPTYP3YN=1 or ELMPTYP4YN=1, respectively. So TLMPAMT may be an overestimate of lump sum payments from a pension or retirement plan.
• It is not possible to separately identify lump sum and regular distribution amounts for all respondents that receive retirement income.

For data users interested in creating a year-level retirement income recode: Not all respondents are on the public-use file for all twelve months, so monthly pension income (TRET1AMT-TRET8AMT) is not available for the months in which a respondent is not on the file.