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June 25, 2001 at 08:00 PM
NU Online News Service, June 25, 9:50 a.m. – Fresh insights into the characteristics of IRA owners came to light in research just released by the Employee Benefit Research Institute in Washington, D.C. Gender, race, age and other demographic factors were found to play a key role in whether individuals own an individual retirement account and how big their balance is.
The analysis focuses on all adult Americans, using data from the U.S. Census Bureau to examine IRA participation, contributions and withdrawals. Most past IRA research focused only on households, taxpayer units or workers rather than all adults, EBRI observes.
Assets held in IRAs reached $2.47 trillion in 1999, more than was held either in private trusteed defined-contribution retirement plans (such as 401(k) plans) or in traditional defined-benefit pension plans. Most IRA asset growth came from investment gains and rollovers from other tax-qualified plans such as 401(k)s and not from new contributions, EBRI says.
The June issue of EBRI Notes provides new statistics on the relationship of demographic characteristics and IRA ownership among all Americans age 21 and older. These data give a baseline for future comparison with IRA statistics from after the enactment of the Tax Reform Act of 1997 (TRA ’97), which increased the eligibility standards for deductible IRA contributions for some workers.
Among the article’s key findings:
– Approximately 16 percent of Americans age 21 and older owned an IRA in early 1997. The average IRA balance for those who owned one was $27,025 in 1996, and the average number of years IRA owners contributed to the account was 8.1 years.
