Individual retirement account holders tend to stick with regular contributions and increase their deposits each year, according to an industry survey.
The Investment Company Institute and the Securities Industry and Financial Markets Association researched 10 million accounts to highlight IRA contributions, rollover and withdrawal activity, and the types of assets that investors hold in these accounts.
The data showed that 63% of traditional IRA investors who contributed to their accounts in 2007 made repeat contributions in 2008. Sixty percent of those who contributed in 2007 made the largest contribution allowed by law. Among those who maxed out in 2007, more than half increased their contributions in 2008 to the new, higher legal limits.
Still, IRA contributions were low for the period tracked. In 2007, 11.2% of traditional IRA investors made contributions to their traditional IRAs while 9.4% contributed in 2008. Factors affecting the low rates include individuals opting to save through employer-sponsored plans and Social Security replacing a much higher fraction of pre-retirement earnings. The survey also found IRA rule confusion prevents some individual from contributing.
Meanwhile, in 2007, women IRA investors were more likely to make contributions compared to men at 11.9% and 10.7%, respectively.
At the end of 2009, IRA investments, which totaled $4.2 trillion, represented more than one-quarter of total U.S. retirement market assets and almost 10% of U.S. households' total financial assets, according to the survey.