The paper aims to assess tax-favored retirement accounts in a general-equilibrium overlapping-generations economy with idiosyncratic income risk and borrowing constraints. Our simulations indicate that tax-favored retirement accounts as implemented in many OECD countries will have a significant impact on savings and transitional capital accumulation. In our most preferred specification, the latter will rise by roughly 6%, while about 22% of retirement account contributions are additional savings. While existing generations are worse off, future generations benefit significantly from higher bequests, higher wages, and lower tax burdens. However, since the reform also alters the insurance provision of the tax system, aggregate efficiency effects are mostly either negative or insignificant. Finally, it turns out that withdrawal penalties and tax-exempted accounts have positive growth and distributional implications.