Average IRA Balance for Consistent Account Owners up Nearly 50% Since 2010

Individual retirement accounts generally show consistent growth, but differences do arise when comparing data samples, according to a new report from EBRI.

For example, while the cross-sectional overall average balance increased 36.1% from 2010 to 2015, the increase for those IRA owners who continuously owned IRAs from 2010‒2015 was 47.1%.

EBRI’s January 2018 issue brief, “Individual Retirement Account Balances, Contributions, Withdrawals, and Asset Allocation Longitudinal Results 2010–2015: The EBRI IRA Database,” examines trends in account balances, contributions, withdrawals and asset allocation in IRAs from 2010-2015. The brief looks at both the annual cross-sectional samples and a consistent sample of IRA owners who have been in the database in each year from 2010-2015.

For consistent account owners, the distribution of actual changes in the account balances for the lowest 25% (regardless of age) had increases of less than 0.1% since 2010, but the highest 25% of balance increases exceeded 87%.

Meanwhile, the report shows that consistent Roth IRA owners experienced a much higher distribution of increases, with the lowest 25% of balance increases for IRAs reaching nearly 30%, while the highest 25% exceeded 117.3%.

The overall average balance for consistent account owners increased from $99,603 in 2010 to $146,513 in 2015. Average balances for each gender also increased each year. The median values followed a continual upward trend across all IRA owner groups, except for those ages 65 or older, according to the data.

The brief notes that there were considerable differences by IRA type in the likelihood of consistent account owners contributing to an IRA and in the number of years contributions were made. For traditional IRA owners, 87.2% did not contribute to their IRA in any year, while 1.8% contributed in all six years. In comparison, 60.1% of Roth IRA owners did not contribute in any year and 9.7% contributed in all six years.

Overall average contributions increased each year through 2013 before a slight decline in 2014 and a small increase in 2015. In 2010, the average contribution was $3,335, increasing to $4,145 in 2013, before declining to $4,119 in 2014 and increasing to $4,169.

Asset Allocation

EBRI’s brief notes that changes in asset allocation among consistent account owners were relatively small from 2010-2012, but generally moved toward higher equity holdings from 2010-2015, despite a drop in 2015. In addition, equity allocations in 2015 were found to be higher than the values in 2010 across all groups studied.

According to the findings, the share of assets allocated to equities among consistent account owners was 44.5% in 2010, 44.2% in 2011 and 46.4% in 2012. After 2012, the percentage allocated to equities increased, reaching 53.1% in 2014, before a minor drop in 2015 to 52.6%. Meanwhile, the percentages allocated to bonds, money, and other assets all fell from 2010 to 2015, while the percentage allocated to balanced funds inched upward, EBRI notes.

The annual cross-sectional snapshot also shows somewhat of a zig-zag movement, with the percentage allocated to equities decreasing from 45.7% in 2010 to 44.4% in 2011 before increasing to 52.1% in 2012, 54.7% in 2013 and 55.7% in 2014, before declining again to 54.7% in 2015.

Among extreme allocations, the brief shows that more than a quarter (27.1%) of IRA owners in the consistent sample had 0% allocated to equities in 2010 and 2015, while 16.8% had 100% allocated to equities in both years.

The EBRI IRA Database is an ongoing project that collects data from various types of IRA administrators. For year-end 2015, it contains information on 27.9 million accounts owned by 22.1 million unique individuals, with total assets of $2.76 trillion.

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