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IRA balances soar

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The average IRA balance rose to $119,804 in 2013, an increase of 30.4 percent from 2010, and 14.1 percent from 2012, according to new data from the Employee Benefit Research Institute.

Median, or mid-point balances, followed the same pattern, according to the EBRI, rising to $32,179 in 2013, up 27.2 percent from 2010, and 15 percent from 2012.

Predictably, researchers at the nonprofit expect IRA balances to continue to rise as more baby boomers retire and rollover workplace savings plans.

“The increase found in the average balances in 2013 are likely to continue, as is the importance of IRA assets for individuals during retirement,” said Craig Copeland, senior research associate and author of the report.

“With growing 401(k) plan balances and IRAs being a popular destination for 401(k) assets when people change jobs or retire, the amount of income derived from IRAs will grow significantly as a supplement to Social Security,” Copeland added.

The EBRI’s IRA database tracks account information from plan administrators from 25.8 million accounts with total assets of $2.46 trillion at year-end 2013.

According to data from the Investment Co. Institute, the trade group for the mutual fund industry, total IRA assets at the end of the 2014 third quarter hit $7.3 trillion, representing 30 percent of all retirement assets in the country.

In its recently proposed conflict of interest rule, which aims to require all advisors to IRAs to provide a fiduciary standard of care, the Department of Labor said rollovers to IRAs exceeded $300 billion in 2012. The report estimates the amount of rollovers to exceed the trillions in the coming five years.

The new EBRI data shows the percentage of individuals contributing to their IRAs as holding steady, with 13.8 percent adding new assets in 2013, up from 12.1 percent in 2010.

The average contribution was $4,145 in 2013, below the IRS’s maximum contribution limit of $5,500.

In 2012, 53.5 percent contributed the maximum to IRAs, whereas in 2013, only 43.3 percent contributed the maximum, which the EBRI attributes to an increase in the deferral cap.

Roth IRAs grew 51.6 percent between 2010 and 2013, compared to 28.3 percent with traditional IRAs. Roth IRAs make up 23.1 percent of all IRAs tracked in the EBRI database.


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