NU Online News Service, Dec. 18, 1:27 p.m. – The value of assets in individual retirement accounts declined to approximately $2.4 trillion in 2001, a reduction of more than $140 billion from the 1999 peak, according to the Employee Benefit Research Institute, Washington.
It was the largest annual decrease in IRA assets since Congress created IRAs more than two decades ago, EBRI says.
The decline can be attributed to the drop in stock prices. However, assets held in bank accounts or with life insurance companies increased from 1999 to 2001.
IRAs now account for the largest share (22%) of the $11 trillion in total U.S. retirement assets, EBRI says.
More than 17% of Americans 21 or older, including nearly 21% of retirees, now own IRAs. The number grew steadily from 1996 to 2000 and correlates with family income, educational level, and age, EBRI says.
IRA growth has been fueled by “rollovers” of assets from other types of retirement plans and investment gains. Most IRA owners don’t make a contribution in a given year, although those who do contribute tend to save the maximum allowable, EBRI says.