Lack of Understanding Linked to Low IRA Ownership
New research from TIAA finds that 28 percent of Americans who don't own an individual retirement account (
But with 91 percent of current
"With so many competing financial priorities, it's not surprising to find that Americans focus on their current needs," said
Another factor stopping the people who don't use IRAs: 46 percent of those surveyed don't think they have enough money to save any more than they currently do. It's OK to start small: Of those who do have an
But those who have the resources to save more may be making other choices worth reconsidering as they plan for the future. While a majority of
Back to basics
People who do have IRAs listed three factors as the biggest help getting started:
personal support from a financial advisor (40 percent),
general educational information about IRAs (25 percent), and
a clear and simple process to open an
Women especially value a personal relationship, with nearly half saying support from an advisor helped them start saving with an
Many Americans could use more information about the potential tax benefits that come with IRAs, as 44 percent of those surveyed say they don't know about those benefits or don't understand them. While seven in 10 Americans say they are aware of these potential tax benefits, only 54 percent say they actually understand them. Learning more about these benefits could drive more to open an
People who do have IRAs aren't necessarily using them efficiently. Nearly four in 10 of those with an
Reaching Gen Y
Gen Y may have the most to learn when it comes to the benefits of IRAs. They are more likely than older generations to say they don't know enough about them: 37 percent compared to 27 percent of Gen X respondents and 17 percent of baby boomers.
Only 43 percent of Gen Y respondents are aware of the potential tax benefits and how they work. The good news: 50 percent say they are more likely to contribute to an
"Our younger customers have a long way until retirement, and that's exactly why they may benefit the most from an
Accounts left behind
Americans using IRAs appear to be putting thought into their future strategy for withdrawals, with two-thirds of
But one-third of Americans have left a retirement plan behind at a past job - and that makes it harder to keep track of savings and watch them grow. Forty-three percent of Gen Xers have left behind a plan, along with 35 percent of Gen Y and 23 percent of boomers.
While 30 percent say they did not roll over a former employer's retirement plan into an
17 percent say they didn't know what they should do.
17 percent didn't know they could.
13 percent don't have time.
9 percent think the process is too complicated.
"Many Americans think
About
The survey was conducted by
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