Rollovers Play Big Role in IRA Assets

Research by the Investment Company Institute underscores the importance of rollovers for IRAS.
By Joe Mont ,

BOSTON (TheStreet) -- The benefits of rollovers on IRA asset levels are making the plans more popular for investors, according to a report from the Investment Company Institute, the national association of U.S. investment companies.

In May, more than half of U.S. households owning traditional IRAs had rollover assets in their traditional IRAs. Among households reporting rollover activity, 85% indicated the entire plan balance was preserved with the rollover.

Among the nearly 49 million U.S. households owning IRAs in May (when the study was conducted), IRA assets accounted for about one-third of household financial assets, according to ICI's

The Role of IRAs in U.S. Households' Saving for Retirement

. With $4.2 trillion in assets, IRAs accounted for more than one-quarter of all U.S. retirement wealth in the second quarter of this year.

Other findings from the study were that 41% of U.S. households own IRAs. Eight percent owned IRAs only, and 33% had IRAs and also participated in employer-sponsored retirement plans.

IRA owners, generally, plan to hold off on making IRA withdrawals until required to do so by law, ICI found. Fifty-nine percent of traditional IRA­­-owning households not making withdrawals in tax year 2009 indicated it was unlikely they would withdraw from their IRAs before required at age 70½. Living expenses and emergency expenses were the two most frequently mentioned expected future uses of IRA funds.

-- Written by Joe Mont in Boston.

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