Who Contributes to Individual Retirement Accounts?

IB#17-8

The brief’s key findings are:

  • IRAs were intended to give those without an employer plan access to a tax-deferred savings vehicle.
  • Today, IRAs hold nearly half of all private retirement assets, but most of these funds are rollovers from 401(k)s, rather than contributions.
  • The 14 percent of households who do contribute to IRAs include:
    • 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).
  • One way to turn IRAs back into an active savings vehicle – one used more for contributions – is to auto-enroll all workers without an employer plan in an IRA.