A recent survey finds that most households are rolling their entire retirement plan account balance into an individual retirement account, and that the vast majority claim to have a strategy for managing income and assets in retirement.
“The Role of IRAs in US Households’ Saving for Retirement, 2016,” by the Investment Company Institute (ICI), found that 76% consulted a professional financial adviser when creating their strategy, 26% consulted a website, 24% consulted with friends or family, 23% consulted written materials, such as a book, magazine, or newspaper, and 10% used a financial software package. Two-thirds (67%) of households consulted multiple sources of information before making the move.
In 2016, 59% of all traditional IRA-owning households had traditional IRAs that included rollover assets, the study found. Households cited multiple reasons for rolling over accumulations from their employer-sponsored retirement plans to traditional IRAs:
When asked about their most recent rollover, the vast majority (82%) of these households transferred the entire retirement plan account balance into the traditional IRA. Nearly 9 out of 10 traditional IRA-owning households with rollovers made their most recent rollover in 2000 or later, including 74% whose most recent rollover was in the past 11 years.
Twenty-five percent of traditional IRA-owning households surveyed in 2016 had taken withdrawals in tax year 2015, and nearly 90% of them were retired. Most of the withdrawals were required minimum distributions (RMDs), which traditional IRA owners are required to take beginning at age 70½. Traditional IRA withdrawals were generally used for living expenses, reinvestment, home purchase or repairs, health care expenses or emergencies.
“The Role of IRAs in US Households’ Saving for Retirement, 2016,” by the Investment Company Institute (ICI), found that 76% consulted a professional financial adviser when creating their strategy, 26% consulted a website, 24% consulted with friends or family, 23% consulted written materials, such as a book, magazine, or newspaper, and 10% used a financial software package. Two-thirds (67%) of households consulted multiple sources of information before making the move.
In 2016, 59% of all traditional IRA-owning households had traditional IRAs that included rollover assets, the study found. Households cited multiple reasons for rolling over accumulations from their employer-sponsored retirement plans to traditional IRAs:
- 64% did not want to leave assets with their former employer
- 63% said they wanted to preserve the tax treatment of the savings
- 58% did so to increase investment options
- 57% wanted to consolidate savings
When asked about their most recent rollover, the vast majority (82%) of these households transferred the entire retirement plan account balance into the traditional IRA. Nearly 9 out of 10 traditional IRA-owning households with rollovers made their most recent rollover in 2000 or later, including 74% whose most recent rollover was in the past 11 years.
Twenty-five percent of traditional IRA-owning households surveyed in 2016 had taken withdrawals in tax year 2015, and nearly 90% of them were retired. Most of the withdrawals were required minimum distributions (RMDs), which traditional IRA owners are required to take beginning at age 70½. Traditional IRA withdrawals were generally used for living expenses, reinvestment, home purchase or repairs, health care expenses or emergencies.
- Log in to post comments