According to a new Employee Benefit Research Institute (EBRI) report based on the organization’s own data, total assets in IRAs are up 25% on average. At $732.9 billion, IRAs represent the bulk of the $13 trillion in 14.1 million retirement accounts across the United States.
According to EBRI, traditional IRAs, including rollover IRAs from employer-based retirement plans, account for 67% of all IRAs, whereas Roth IRAs, funded with after-tax dollars and where qualified withdrawals are treated as tax-free income, account for roughly a quarter of the market. The report also disclosed a host of other interesting statistics. For example, more than half of IRAs have a balance of at least $25,000. The average IRA owner has $68,498 invested in one or more accounts, with men (56.6%) being slightly more likely to own an IRA than women (43.4%). Along a similar vein, men ($91,063) tend to have higher average balances than women ($51,314).
Notably, most investors don’t make the maximum annual IRA contribution of $5,000 ($6,000 for those 50 and older). The average annual IRA contribution is $3,798 for traditional IRAs and $3,582 for Roth IRAs. What’s more, the volatile market seems to be taking its toll, with just 7.2% of traditional IRA owners adding to their accounts in 2008.
Remember that when you change jobs, you have the option to rollover your 401(k) or pension plan lump sum into an IRA. And don’t forget that you have until the end of the year to consider whether converting an IRA (fully or partially) to a Roth IRA is right for you. You should consult your advisor with questions about Traditional IRAs, Roth IRAs, rolling over your 401(k) into your IRA, or converting an IRA to a Roth IRA.