Summary Box: New IRA study says few accountholders contribute new money to IRAs
By APTuesday, July 27, 2010
Summary Box: New IRA study reveals saving trends
NEW RESEARCH: The Investment Company Institute, a trade group for the investment industry, released details Tuesday of a study of 10 million IRA investor accounts to learn about who owns them, their level of contribution and withdrawal behavior.
WHAT IT SAYS: A small percentage of IRA accountholders contribute new money. Just 9.4 percent of investors in traditional IRA accounts added contributions in 2008, down from the 11.2 percent in 2007. That could be because IRA owners prioritize contributions to other retirement accounts or just use the IRA to consolidate money from a 401(k) and other accounts. Those who contribute, however, seem dedicated to saving.
HOW IT HELPS: IRAs hold more than a quarter of all retirement assets in the United States — about $4.2 trillion. That’s about 10 percent of financial assets owned by all U.S. households. Understanding the behavior of retirement account investors is an important step to helping people save enough for retirement now that more than 60 percent of workers rely on their own savings rather than on a traditional pension.
