IRAs Succeed in Dual Mission as Contributory, Rollover Savings Vehicles
Reports released today from the
"With
The updated reports, titled "The IRA Investor Profile:
Some key findings from the reports include:
Roth IRA investors tend to be younger than traditional IRA investors. At year-end 2015, 31 percent of Roth IRA investors were younger than 40, compared with 16 percent of traditional IRA investors. Only 25 percent of Roth IRA investors were 60 or older, compared with 40 percent of traditional IRA investors. According to the reports, this younger age distribution reflects, in part, the rules governing access to
Traditional IRAs are typically opened by rollovers, while
IRA investors with contributions tend to persist with the contribution activity year-to-year. For example, more than seven in 10 traditional IRA investors who contributed in tax year 2014 also contributed in tax year 2015. Persistence in contribution activity was even higher for Roth IRA investors, as eight in 10 Roth IRA investors with contributions in tax year 2014 also contributed in tax year 2015.
Roth IRA assets are allocated more to equity funds--including equity mutual funds--than are traditional IRA assets. At year-end 2015, 66 percent of Roth IRA assets were invested in equities and equity funds--mutual funds, exchange-traded funds (ETFs), and closed-end funds--compared with 54 percent of traditional IRA assets. Allocation to target date funds and non-target date balanced funds were the same between
Withdrawal activity is much lower among Roth IRA investors than traditional IRA investors. In 2015, 4 percent of Roth IRA investors made withdrawals, compared with 24 percent of traditional IRA investors. In contrast to traditional IRAs, which require investors aged 70½ or older to take required minimum distributions (RMDs),
About The IRA Investor Database
The IRA Investor Database is designed to shed light on key determinants of IRA contributions, rollover, and withdrawal activity, and the types of assets that investors hold in these accounts. The database supplements existing household surveys and
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