Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > Mutual Funds > Equity Funds

Youngest IRA owners are most extreme investors

By Warren S. Hersch

X
Your article was successfully shared with the contacts you provided.

Roth and traditional individual retirement account owners had the highest percentages of “extreme asset allocations”, according to an October 2013 report from the Employee Benefits Research Institute.

The research reveals that, among all investors, Roth and traditional IRA owners had allocated in 2011 more than 90 percent of their investments into equities or more than 90 percent of funds into money. Traditional rollover owners had the lowest percentage of investors with more than 90 percent of investments in equities.

The report defines extreme allocations as having less than 10 percent or more than 90 percent of funds invested in a particular asset category.

Roth and traditional contribution IRA owners were more likely to have extremely low percentages of money and bonds. In contrast, traditional rollover and SEP/SIMPLE owners were much more likely to have 10 percent or less in equities and 90 percent or more in money funds.

The research notes also the likelihood of extreme allocations was very similar across genders in 2011: Nearly three in 10 (29.3 percent) of women had 90 percent or more in equities, compared with 28.4 percent for men. Similarly, 62 percent of women had less than 10 percent of funds in bonds, while 64.6 percent of men did.

The youngest (less than age 25) IRA owners had the highest percentage, with more than 90 percent in equities at 37.5 percent. The percentage was smaller (30.6 percent) for those ages 25-44.

The percentage was larger (33.5 percent) for those ages 45-54, after which the percentage declined for each older age group until ages 75-84, where the percentage with more than 90 percent in equities slightly increased.

Above age 25, the research notes, the percentage with more than 90 percent in bonds and money combined decreased as the owner’s age increased above 25 until age 75, when the percentage increased for the oldest IRA owners.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.