Today, we’re rounding up the best IRA statistics for 2023. Let’s get started.
Key IRA Statistics 2023 – MY Choice
- There’s 5.4 trillion dollars in IRA’s
- Assets in IRA’s have grown 10% per year
- Nearly 49 million households have a traditional IRA
- That’s about 40% of the population
- An additional 20.3 million own Roth IRA’s
- 46% of IRA’s are invested in mutual funds
- The rest are in brokerage accounts
- The IRA breakdown is 38% in stock funds, 13% in world equity funds, 21% held target date and lifecycle funds, 20% are in bond funds, 9% in money markets
General IRA Statistics 2023
1. IRAs are the largest pool of assets in the US retirement market.
- Americans held $11.0 trillion in individual retirement accounts (IRAs) at year-end 2019
- 34% of the $32.3 trillion is in dedicated retirement assets.
- Forty-four percent of IRA assets, or $4.8 trillion, were invested in mutual funds.
- The most common type of IRA is the traditional IRA, which was created by the Employee Retirement Income Security Act of 1974 (ERISA)
2. The incidence of IRA ownership increases with age.
- People of all ages own IRAs, but ownership is greatest among the older groups of working-age individuals. This reflects the life-cycle effects on saving
- households tend to focus on retirement-related saving as they get older, and also tend to have rollovers into IRAs as they move through their careers
3. Households of all income groups own IRAs.
- Although IRA ownership tends to increase with household income, half of IRA-owning households had moderate or lower incomes.
- Eighteen percent of households owning IRAs had household income of less than $50,000
- 32% had household income between $50,000 and $99,999
4. IRA balances tend to rise with length of ownership.
- Households’ IRA balances tend to be higher the longer they have owned their IRAs.
- households owning IRAs for less than 10 years had median IRA holdings of $20,000.
- households owning IRAs for 20 years or more had median IRA holdings of $225,000.
5. Equity holdings figure prominently in traditional IRA investments.
- Equities and equity funds represent 53% of traditional IRA investors’ accounts.
- Investors also may hold equities through target date funds and non–target date balanced funds,
- 64% of traditional IRA assets were invested in equity holdings (equities, equity funds, and the equity portion of target date funds and non–target date balanced funds)
- Asset allocation in traditional IRAs varies with investor age and size of traditional IRA balance.
6. Although few traditional IRA investors make contributions, those who do display persistence.
- 9% of traditional IRA investors with traditional IRAs at year-end 2015 and year-end 2016 made contributions to their traditional IRAs
- individuals using traditional IRAs as a contributory savings vehicle tend to contribute from year to year
- 63% of traditional IRA investors who contributed at the limit in 2015 also did so in 2016.
7. Rollovers from employer-sponsored retirement plans have fueled growth in IRAs
- Fifty-nine percent of traditional IRA–owning households in 2019 indicated their traditional IRAs contained rollovers from employer-sponsored retirement plans.
- 86% indicated they had rolled over the entire retirement account balance in their most recent rollover.
- Households with rollover assets in their IRAs tend to have higher IRA balances compared with IRAs funded purely by individual contributions.
- Median traditional IRA holdings that include rollovers were $120,000 in 2019, compared with median traditional IRA holdings of $35,000 for balances that did not include rollovers.
8. A large majority of individuals consult a financial professional when rolling over assets to a traditional IRA from a former employer’s retirement plan.
- Traditional IRA–owning households generally researched the decision to roll over money from their former employer’s retirement plan into a traditional IRA.
- Sixty-six percent consulted multiple sources of information.
- the most common source was financial professionals, who were consulted by 62 percent of traditional IRA–owning households with rollovers.
- thirty-eight percent of traditional IRA–owning households with rollovers consulted materials provided by their employers.
9. Most IRA owners consult a financial professional when creating a retirement strategy
- Sixty-eight percent of traditional IRA–owning households reported that they have a strategy for managing income and assets in retirement, and creating their strategy often involved multiple steps
- Their strategies include actions such as setting aside emergency funds, developing a retirement income plan, reviewing asset allocation, reviewing insurance policies, determining retirement expenses, and determining when to take Social Security benefits.
- These households typically seek help when building their retirement income and asset management strategy.
- 74 percent of traditional IRA–owning households with a strategy consulted a financial professional when creating the strategy.
- 69 percent indicated that a financial professional was the primary source consulted when developing their strategy.
10. IRA withdrawals are infrequent and mostly retirement related, and most households consult a financial professional when taking withdrawals.
- Few households withdraw money from their IRAs in any given year, and most withdrawals are retirement related.
- Twenty-five percent of households owning traditional IRAs in 2019 reported taking withdrawals from these IRAs in tax year 2018.
- Among households taking traditional IRA withdrawals in tax year 2018, 88 percent reported that someone in the household was retired from their lifetime occupation.’
- 49 percent of retired households owning traditional IRAs in 2019 did not take withdrawals in tax year 2018.
- Sixty two percent of traditional IRA–owning households with withdrawals consulted a financial professional to determine the withdrawal amount.
Gold IRA Statistics 2023
- 10.8% of The American Population Owns Gold, While 11.6% Owns Silver
4% of The American Population indicated that they didn’t own either ( Gold or silver).
- 6.5% said they owned both gold and silver.
- A gold IRA often comes with higher fees than a traditional or Roth IRA that invests solely in stocks, bonds, and mutual funds.
- A gold IRA can serve as a good hedge against inflation but is also concentrated in a single asset class.
IRA Statistics FAQs
What is IRA?
Individual Retirement Accounts (IRAs), created in 1974 by the Employee Retirement Income Security Act (ERISA), have helped millions of US households save for retirement.
Congress originally designed traditional IRAs to give individuals not covered by retirement plans at work a tax-advantaged savings plan, and to play a complementary role to the employer-sponsored retirement system by preserving rollover assets at job change or retirement.
Since then, policymakers have introduced new types of IRAs and changed rules surrounding IRAs.
How many people have an IRA in america?
Traditional IRAs are the oldest and most common type of IRA. In mid-2020, 36.8 million US households, or 28.6 percent, owned traditional IRAs
Should I get a Roth IRA or traditional IRA?
A Roth IRA or 401(k) makes the most sense if you’re confident of having a higher income in retirement than you do now. If you expect your income (and tax rate) to be lower in retirement than at present, a traditional IRA or 401(k) is likely the better bet.
How IRA works?
An individual retirement account (IRA) allows you to save money for retirement in a tax-advantaged way. An IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis.
Do millionaires have IRA?
More than $279 billion sits in IRAs with at least $5 million each. They allow the wealthy to avoid taxes and pass on their fortune.
Wealthy people use many accounts to build wealth, and three are widely available. They use retirement accounts like IRAs and 401(k)s for tax benefits and free money.
How many Roth IRA millionaires are there?
The latest numbers come from analysts at Congress’ nonpartisan Joint Committee on Taxation. They update a widely cited study from the Government Accountability Office that released figures on large IRAs in 2011. The new figures show that, as of 2019, nearly 3,000 taxpayers held Roth IRAs worth at least $5 million. Jul 28, 2021
Does Warren Buffett have a Roth IRA?
ProPublica found that Buffett has $20.2 million in his Roth IRA at the end of 2018, while his top lieutenant at Berkshire Hathaway, Buffett’s holding company, has even more in a Roth — $264.4 million.
How much should a 35 year old have in Roth IRA?
Saving 15% of income per year (including any employer contributions) is an appropriate savings level for many people. Having one to one-and-a-half times your income saved for retirement by age 35 is an attainable target for someone who starts saving at age 25.
How much will an IRA grow in 10 years?
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor’s 500® (S&P 500®) for the 10 years ending December 31st 2016, had an annual compounded rate of return of 6.6%, including reinvestment of dividends.
What is the 5 year rule for Roth IRA?
The Roth IRA five-year rule says you cannot withdraw earnings tax-free until it’s been at least five years since you first contributed to a Roth IRA account. This five-year rule applies to everyone who contributes to a Roth IRA, whether they’re 59 ½ or 105 years old.
What are the risks of an IRA?
While a broader set of investment options may have appeal, investors should be mindful that investments in self-directed IRAs raise risks including fraudulent schemes, high fees, and volatile performance. An Individual Retirement Account (IRA) provides investors with certain tax benefits for retirement savings.
Is an IRA a good investment?
Individual retirement accounts (IRAs) give investors a fantastic opportunity to save on taxes. Pay your future self by investing in an IRA, and you can also lower your income tax bill. Clever retirement investors know an even better strategy to minimize their taxes, though: Use a Roth IRA.
How does an IRA grow your money?
A Roth individual retirement account (IRA) provides tax-free growth and tax-free withdrawals in retirement. Roth IRAs grow through compounding, even during years when you can’t make a contribution.
Do billionaires use Roth IRA?
Among the billionaires who have exploited the rules for Roth IRAs is Peter Thiel, one of Paypal’s founders, whose account was worth $5 billion as of 2019 after a value of under $2,000 in 1999, according to the ProPublica report. (CNBC has not independently verified any details in the report.)
How much retirement should I have by 45?
Once again, by age 45, you should have at least 8X your annual expenses saved. If you do, you should be well on your way to a comfortable regular retirement around age 60. If you want to retire earlier, then you obviously have to save more or spend less.
What is the average 401k balance for a 58 year old?
Average 401k Balance at Age 55-64 – $586,486; Median – $270,698.