IRA Owners Possess Traits Many Credit Unions Might DesireMINNEAPOLIS - It's been a "love-hate relationship for some credit unions and banks when it comes to individual retirement accounts, but their owners still possess traits that find them appealing to court. According to data from Wolters Kluwer Financial Services, the median traditional IRA owner is 52-years-old, has a household income of $62,500, maintains $250,000 in financial assets, and holds $30,000 in all types of IRAs. They are also likely to be married and have two kids. Sixty-six percent of traditional IRA owners are employed full- or part-time, and 54% have college or postgraduate degrees. There are now 4,152 CUs offering IRAs. At $48.9 billion, they accounted for 8.6% of CU share composition as of Sept. 30, 2005, according to Callahan & Associates, Inc. Still, it's been a "love-hate relationship" with IRAs over the years, Wolters Kluwer said. Financial organizations loved IRAs during the heyday years of universal deductibility from 1982 to 1986 when the market was booming but "the luster dimmed" in 1987 with the loss of universal deductibility for IRAs and owners moved accounts to brokerages and mutual funds. "It's time to fall in love again," Wolters Kluwer said. "The market is large; IRA owners are worth pursuing as a profitable market segment; newer IRA-type accounts expand the total opportunity; and new technology solutions make offering and maintaining IRAs easier than ever." Today, Callahan, Wolters Kluwer and other firms have noted, rollovers are a key element of IRA growth According to a Financial Research Corp. study, $409 billion in rollovers is estimated to take place by 2010 where as contributions will account for $27 billion for the same time period. Roth IRA owners are also worth pursuing. The median Roth IRA owner is 47 years old, has a household income of $70,000, maintains $137,000 in financial assets, and holds $21,800 in all types of IRAs. Twenty-six percent of current traditional IRA owners made a contribution in 2003 with a median contribution amount of $2,500. The overall percentage of Americans making annual IRA's contributions, however, is still low, Wolters Kluwer said. Forty-one percent of Roth IRA households contributed to their Roth IRA in 2003 with a median contribution amount of $3,000. Overall, IRA owners are savers and tend to save on a regular basis, the firm found. -
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