Nearly half of all households that own traditional IRAs report that their IRAs include rollovers from employer plans, according to Investment Company Institute rresearch. Moreover, 85% of those IRA owners rolled over their entire retirement account balance in their most recent rollover. A similar percentage, 84%, also had employer-sponsored retirement plans — either DC plan accounts or either current or future DB plan payments. According to the ICI study, 67% of all U.S. households had some type of formal, tax-advantaged retirement savings.
Other finding include:
• While most U.S. households are eligible to make contributions, few actually do so. Only 15% of contributed to any type of IRA in tax year 2012, and very few eligible households made catch-up contributions to traditional IRAs or Roth IRAs. Among non-retired traditional IRA-owning households not making contributions in tax year 2012, 37% say they did not contribute to their IRAs because they were saving enough through their retirement plans at work.
• IRA withdrawals are infrequent and mostly retirement related. Twenty-one percent of traditional IRA-owning households took withdrawals in tax year 2012, the same percentage as in tax year 2011.
• Traditional IRA-owning households not making withdrawals generally indicated they do not plan to tap their IRAs until age 70-1/2. Sixty-six percent of traditional IRA-owning households not making withdrawals in tax year 2012 say it is unlikely they would withdraw from their IRAs before age 70-1/2. The most commonly cited planned future uses of IRA withdrawals were to pay for living expenses and to cover emergencies.
