The majority of U.S. households that have traditional IRAs say that those accounts contain rollovers from employer retirement plans.
According to the study “The Role of IRAs in US Households’ Saving for Retirement, 2018,” from the Investment Company Institute, 58% of traditional IRA-owning households (19 million U.S. households) said their traditional IRAs contained rollovers from employer-sponsored retirement plans in 2018.
Respondents cited several reasons for rolling over those accounts: They didn’t want to leave assets with a former employer (64%); they wanted to preserve the tax treatment of those savings (60%); they were consolidating assets (54%); and rolling the funds over gave them more investment options (54%).
In addition, more than four in 10 traditional IRA-owning households with rollovers said they also made contributions.
The study also found that households with traditional IRAs rarely withdrew from their accounts, with most withdrawals retirement related. Just 26% of households owning traditional IRAs in 2018 took withdrawals in tax year 2017, which is consistent with previous years.