A unique analysis by the nonpartisan
Based on the latest results from the EBRI IRA Database, the median increase for these consistent owners of Roth IRAs (mid-point, or half above and half below) was 16.6 percent from 2010 to 2012, compared with 7.9 percent for consistent owners of traditional IRAs.
A major factor in these different rates of increase was that new contributions make up a larger proportion of the Roth IRA balances due to the smaller average balances of Roth IRAs as well as the larger percentage of Roth owners making contributions each year than they do for traditional IRAs, which magnified the impact of contributions. EBRI also found that Roth IRA balances grew faster than traditional IRAs at each age group and for each gender.
Looking at individuals who maintained an IRA account in the database over the three-year period, the overall average balance increased each year--from
The EBRI IRA Database is unique in its ability to track individual IRA owners with more than one account across multiple providers, thereby offering a more accurate and comprehensive measure of how much these individuals have accumulated in IRAs. For year-end 2012, it contained information on 25.3 million accounts owned by 19.9 million unique individuals, representing total assets of
It is also unique in its ability to track IRA owners who hold their accounts over time, as opposed to a simple point-in-time "snapshot."
"An annual snapshot of those contributing to IRAs doesn't allow you to assess whether the same individuals were contributing on a regular basis, or if different people contributed in different years, whereas a consistent longitudinal sample of IRA owners does allow for this examination," Copeland said. "For example, among traditional IRA owners, approximately 6 percent contributed to the IRA each year, but over a three-year period approximately 10 percent of traditional IRA owners contributed in at least one of those years. Among Roth IRA owners, approximately 25 percent contributed in any one year, compared with 35 percent who contributed at some point over the three-year period."
Other major findings in the EBRI IRA study:
* The overall average IRA account balance in 2012 was
* Rollovers overwhelmingly outweighed new contributions in dollar terms. While almost 2.4 million accounts received contributions, compared with the 1.3 million accounts that received rollovers in 2012, 10 times as much was added to IRAs through rollovers, compared with contributions.
-The average individual IRA balance increased with age for owners ages 25 or older, from
* IRA owners were more likely to be male. In particular, those with an IRA originally opened by a rollover, or a SEP/SIMPLE IRA were more likely to be male (57.4 percent of the former, and 58.2 percent of the latter).
* Males had higher individual average and median balances than females:
* Younger Roth IRA owners were much more likely to contribute to the Roth IRA than were older Roth IRA owners: 43 percent of Roth owners ages 25-29 contributed to their Roth in 2012, compared with 21 percent of Roth owners ages 60-64.
The full report, "Individual Retirement Account Balances, Contributions, and Rollovers, 2012; With Longitudinal Results 2010-2012: The EBRI IRA Database," is published in the
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