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IRA assets move out from under the mattress

By Allison Bell

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Low interest rates and the fading of Great Recession terror may have contributed to a dramatic shift in U.S. individual retirement account asset allocations between 2010.

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Craig Copeland, an analyst at the Washington-based Employee Benefit Research Institute, has included data on the IRA shift in a report on the performance of about 27 million IRAs in an EBRI database.

The IRA holders had only 25.4 percent of their assets in cash options or bond funds in 2014, down from 28.8 percent in 2010.

The percentage of assets in stocks and stock funds rose to 55.7 percent, from 45.7 percent.

The flight from bonds affected IRA holders in age group. For holders ages 75 to 84, for example, the percentage of assets in bonds fell to 19.3 percent in 2014, from 25.3 percent in 2010.

Copeland also found that:

      • 30.3 percent of the IRA holders had an account balance under $10,000, and those holders held 23.9 percent of the assets of the IRAs in the database.

      • Traditional IRAs of various kinds held 77.1 percent of the assets.

      • Half of the IRAs had a balance that increased by 43.6 percent or more between 2010 and 2014, and half had a balance that fell or decreased by less than 43.6 percent.

      • In 2014, only 44.9 percent of the Roth IRAs contributed to their IRAs; 66.5 percent of the traditional IRA owners contributed to their IRAs.

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