Assets held in individual retirement accounts topped those in defined contribution plans by 41% at the end of 2016 — coming in at $7.85 trillion in IRAs versus $5.56 trillion in DC plans.
The IRA growth, according to a just-released report by Washington-based Employee Benefit Research Institute, “has been at least partially attributable to rollovers from assets built up in employment-based plans.”
Consequently, “much of the assets from DC plans have ended up in IRAs, where individuals can draw them down to fund their retirement as necessary, or can at least withdraw the assets as required by the required minimum distribution rules,” according to the report, Individual Account Retirement Plans: An Analysis of the 2016 Survey of Consumer Finances.
The percentage of families who owned either an IRA or a Keogh plan increased in 2016 to 29.9% from 28.1% in 2013 and 28% in 2010, the report states, noting that this ownership rate was near the 2007 level of 30.6% but below the peak level of 31.4% in 2001.
Ownership of an IRA/Keogh increased with family income, the family head’s educational level, and the family’s net worth, according to the report: Of families with less than $10,000 a year in income, 5.2% owned an IRA/Keogh in 2016, compared with 59.3% of families with income of $100,000 or more.
EBRI notes that its survey is based on findings from the Federal Reserve’s triennial survey of wealth, the Survey of Consumer Finances.