Individual retirement accounts may cumulatively hold close to half of private retirement assets, but that doesn't mean that IRAs are as broadly used by multiple segments of the population as they could be—nor does it mean that people are actively contributing to them.

In fact, according to a brief from the Center for Retirement Research at Boston College, nearly all IRA asset growth is instead driven by rollovers from employer-sponsored retirement plans. Individuals' contributions represent just 13 percent of the new money flowing into IRAs each year.

While IRAs were intended to give those without an employer plan access to a tax-deferred savings vehicle, the report says, it hasn't quite shaken out that way. Only 14 percent of households contribute to IRAs, and they're mostly made up of higher-income dual-earners who also save in a 401(k); moderate-income singles or one-earner couples, often with a 401(k); and higher-income entrepreneurs with no current 401(k).

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.