Individual Retirement Account Balances, Contributions, and Rollovers, 2013; With Longitudinal Results : The EBRI IRA Database

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1 May 2015 No. 414 Individual Retirement Account Balances, Contributions, and Rollovers, 2013; With Longitudinal Results : The EBRI IRA Database By Craig Copeland, Ph.D., Employee Benefit Research Institute A T A G L A N C E Individual retirement accounts (IRAs) are a vital component of U.S. retirement savings, holding nearly onequarter of all retirement plan assets in the nation. A substantial portion of these IRA assets originated in other tax-qualified retirement plans, such as defined benefit (pension) and 401(k) plans, and were moved to IRAs through rollovers from those plans. As part of the EBRI Center for Research on Retirement Income (EBRI CRI), the EBRI IRA Database is an ongoing project that collects data from IRA-plan administrators across the nation. For year-end 2013, it contained information on 25.8 million accounts owned by 20.6 million unique individuals, with total assets of $2.46 trillion. The average account balance decreased from $91,864 in 2010 to $87,668 in 2011 before increasing to $119,804 in 2013 an increase of 30.4 percent from 2010 to 2013, and 14.1 percent from 2012 to The median (mid-point) followed the same pattern, going from $25,296 to $23,785 to $32,179, representing increases of 27.2 percent between 2010 and 2013 and 15.0 percent between 2012 and The percentage of individuals who contributed to their IRA was relatively consistent ranging from 12.1 percent in 2010 to 13.8 percent in The percentage of individuals owning Traditional IRAs who contributed to them rose from 5.2 percent in 2010 to 7.0 percent in In contrast, the percentage of Roth owners who contributed ranged from 24.0 percent to 26.0 percent from The percentage of contributors who contributed the maximum rose from 43.5 percent in 2010 to 53.5 percent in However, with the increase in the maximum allowable contribution in 2013, the percentage contributing the maximum overall fell to 43.3 percent in The average contribution increased from $3,335 in 2010 to $4,145 in When examining the same individuals that were in the database each year from 2010 to 2013, the median percentage change in these individuals account balances was a 33.6 percent increase. Furthermore, at the 25 th percentile and the 75 th percentile, increases of 2.6 percent and 57.1 percent resulted. The growth rates for Roth IRA balances were higher both overall and by age and gender. The median Roth IRA increase was 51.6 percent from 2010 to 2013, compared with 28.3 percent for all Traditional IRAs. A major factor in these different rates of growth was that new contributions make up a larger portion of the Roth IRAs than they do for Traditional IRAs, which magnified the impact of contributions. In addition, Roth IRAs are not subject to required minimum distributions for those older than 70-½ years, as are Traditional IRAs. A monthly research report from the EBRI Education and Research Fund 2015 Employee Benefit Research Institute

2 Craig Copeland is senior research associate at the Employee Benefit Research Institute (EBRI). This Issue Brief was written with assistance from the Institute s research and editorial staffs. Any views expressed in this report are those of the author and should not be ascribed to the officers, trustees, or other sponsors of EBRI, Employee Benefit Research Institute-Education and Research Fund (EBRI-ERF), or their staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific policy proposals. EBRI invites comment on this research. Copyright Information: This report is copyrighted by the Employee Benefit Research Institute (EBRI). It may be used without permission, but citation of the source is required. Recommended Citation: Craig Copeland, Individual Retirement Account Balances, Contributions, and Rollovers, 2013; With Longitudinal Results : The EBRI IRA Database, EBRI Issue Brief, no. 414 (Employee Benefit Research Institute, May 2015). Report availability: This report is available on the Internet at Data Security The Employee Benefit Research Institute s (EBRI s) retirement databases (the EBRI/ICI Participant-Directed Retirement Plan Database, the EBRI IRA Database, the EBRI Integrated Defined Contribution/IRA Database) have been the subject of multiple independent security audits and have been certified to be fully compliant with the ISO Information Security Audit standard. Moreover, EBRI has obtained a legal opinion that the methodology used meets the privacy standards of the Gramm-Leach-Bliley Act. At no time has any non-public personal information that is personally identifiable, such as Social Security Number, been transferred to or shared with EBRI. None of the three databases allows identification of any individuals or plan sponsors. Table of Contents Data Security... 2 Introduction... 4 Data... 4 IRA Types... 4 Average IRA Balances... 7 Contributions... 7 Rollovers Comparison of Account Balances and Contributions Conclusion About IRAs Endnotes Figures Figure 1, Distribution of IRA Types by Accounts and Individuals, Figure 2, Distribution of IRA Ownership, by Various Demographic Characteristics and IRA Type, Figure 3, Average IRA Balance for All Accounts and Individuals, by IRA Type, Figure 4, Median IRA Balance for All Accounts and Individuals, by IRA Type, Figure 5, Average IRA Balance for All Accounts and Individuals, by Age, ebri.org Issue Brief May 2015 No

3 Figure 6, Median IRA Balance for All Accounts and Individuals, by Age, Figure 7, Average and Median Individual IRA Balance, by IRA Type and Age, Figure 8, Average and Median IRA Balance for All Accounts and Individuals, by Gender, Figure 9, Average and Median Individual IRA Balance, by Gender and Age, Figure 10, Average and Median Individual IRA Balance, by IRA Type and Gender, Figure 11, Percentage of Those Owning a Traditional or Roth IRA Who Contributed to It and the Percentage of Those Contributing Who Contributed the Maximum Allowable Amount, by All Accounts and Individuals, Figure 12, Percentage of Traditional or Roth IRA Accounts That Received a Contribution, by Age of Account Owner, Figure 13, Percentage of Traditional or Roth IRA Accounts That Received a Contribution That Received the Maximum Allowable Contribution, by Age of Account Owner, Figure 14, Percentage of Traditional or Roth IRA Accounts That Received a Contribution, by Gender of Account Owner, Figure 15, Percentage of Traditional or Roth IRA Accounts That Received a Contribution That Received the Maximum Contribution, by Gender of Account Owner, Figure 16, Distribution of the IRAs Receiving Contributions, by IRA Type and Age and Gender of Account Owner, Figure 17, Distribution of Traditional and Roth IRAs Receiving Contributions, by Age and Gender of Account Owner, Figure 18, Distribution of Contribution and Rollover Amounts to Traditional and Roth IRAs, Figure 19, Distribution of Traditional and Roth IRAs That Received a Rollover, by Age and Gender of Account Owner, Figure 20, Distribution of Those Rolling Over to a Traditional IRA, by Age and Gender, Figure 21, Distribution of Rollovers by Amounts to Traditional IRAs, by Number and Value of the Rollovers, Figure 22, Distribution of Rollovers by Amounts to Roth IRAs, by Number and Value of the Rollovers, Figure 23, Average and Median Individual IRA Balances, by IRA Type, Age, and Gender, 2010, 2011, 2012, and Figure 24, Percentage of Individuals Contributing to Their IRA and of Those Contributing Who Contributed the Maximum, Figure 25, Average Contributions to a Traditional or Roth IRA, by Age and Gender, Figure 26, Distribution and Average and Median Individual IRA Balances of a Consistent Sample of Individuals, by IRA Type, Age, and Gender, 2010, 2011, 2012, and Figure 27, Distribution of Individual IRA Balance Changes for a Consistent Sample of Individuals from 2010 to 2013, by IRA Type, Age, and Gender Figure 28, Distribution of IRA Owners by Account Balance for a Consistent Sample from Figure 29, Percentage of Individuals Contributing to Their IRA and of Those Contributing Who Contributed the Maximum for a Consistent Sample of Individuals from Figure 30, Percentage of a Consistent Sample of IRA Owning Individuals from Who Contribute in Various Number of Years, by IRA Type, Age, Gender, and Account Balance Figure 31, Percentage of Individuals, by IRA Type, Contributing Who Contributed the Maximum for a Different Number of Years, Depending on Number of Years of Contributing, for a Consistent Sample of IRA Owners from Figure 32, Average IRA Contribution and the Average Contribution of Those Who Contributed in All Four Years for a Consistent Sample of Individuals from , by IRA Type and Age, Gender, and Account Balance Box Figure A, Sources of Estimated Total U.S. Retirement Plan Assets, ebri.org Issue Brief May 2015 No

4 Individual Retirement Account Balances, Contributions, and Rollovers, 2013; With Longitudinal Results : The EBRI IRA Database By Craig Copeland, Ph.D., Employee Benefit Research Institute Introduction Individual retirement accounts (IRAs) are a vital component of U.S. retirement savings, holding nearly one-quarter of all retirement plan assets in the nation. 1 A substantial and growing portion of these IRA assets originated in other taxqualified retirement plans, such as defined benefit (pension) and 401(k) plans, and were moved to IRAs through rollovers from those plans. The Employee Benefit Research Institute (EBRI) has focused on retirement savings since its inception in 1978 and has been particularly detailed in the study of participants in 401(k) plans, and more recently, of IRA holders as well, notably through the creation of, and updates to, the EBRI IRA Database. This database is able to not only link the account(s) of individuals within and across participating data providers in the IRA database, but also with the account(s) of participants in defined contribution (DC) plans. This is done both within a calendar year and longitudinally, which permits the examination of retirement asset holdings both at a point in time and over time as the individuals age and either change jobs or retire. This Issue Brief, the annual, cross-sectional analysis of the EBRI IRA Database, examines the distribution of IRA owners by IRA type, average and median account balances, and contributions and rollovers to IRAs. 2 Added to this crosssectional study is a longitudinal component that looks at account balance changes and contribution behavior from 2010 to 2013 of a consistent sample of individuals who own IRAs. Data As part of the EBRI Center for Research on Retirement Income (EBRI CRI), the EBRI IRA Database is an ongoing project that collects data from IRA-plan administrators across the nation. For year-end 2013, it contained information on 25.8 million accounts owned by 20.6 million unique individuals, with total assets of $2.46 trillion. 3 For each account within the database, the IRA type, account balance, contributions made and rollovers transferred during the year (if any), the asset allocation, and certain demographic characteristics of the account owner are included (among other items). Based on the richness of the data, the study presents account-level and individual-level results. IRA Types In the EBRI IRA Database, IRAs are classified into five types: (1) Traditional originating from contributions (TOFC), (2) Roth, (3) Simplified Employee Pension (SEP)/Savings Incentive Match Plan for Employees (SIMPLE), (4) Traditional originating from assets rolled over from other tax-qualified plans (TOFR), such as an employment-based pension or a 401(k) plan (although not all the assets in these accounts are exclusively from employment-based sources, so this should not be used as a proxy for the amount of employment-based dollars in IRAs), 4 and (5) other/unknown. 5 The distribution of the IRA accounts in this database as of year-end 2013 was: 34.7 percent TOFC IRAs percent TOFR IRAs (combined Traditional IRAs, 63.8 percent) percent Roth IRAs. 6.8 percent SEPs and SIMPLEs 6.3 percent unknown (Figure 1). 6 ebri.org Issue Brief May 2015 No

5 Figure 1 Distribution of IRA Types by Accounts and Individuals, % 73.3% 70% Accounts Individuals 63.8% 60% 50% 40% 34.7% 41.3% 34.7% 30% 20% 23.1% 28.5% 29.1% 10% 6.8% 8.3% 6.3% 5.9% 0% Traditional Originating from Contributions* Roth Traditional Originating from Rollovers* SEP/SIMPLE All Traditional Unknown * Both of these accounts could have received contributions or rollovers after their origination, so these are NOT proxies for employment-based dollars vs. IRA-only dollars. The traditional originating from rollovers (TOFR) do provide an estimate of the dollars that have been moved into a new IRA. Note: The percentages for individuals add up to more than 100 percent, as an individual may own more than one type of IRA. On a unique individual basis (combining the accounts owned by the same person into one observation), 41.3 percent of those owning an IRA in the database had a TOFC IRA, 34.7 percent had a TOFR IRA (combined Traditional total of 73.3 percent), 28.5 percent had a Roth, 8.3 percent had a SEP or SIMPLE, and 5.9 percent were unknown. Among all IRA owners in the database, nearly one-half (46.6 percent) were ages (Figure 2). However, the age distribution was very different for those owning a TOFC IRA relative to other IRA types. Of those owning a TOFC IRA, 15.3 percent were under age 45, compared with 39.0 percent of those with a Roth, 25.1 percent of those with a TOFR IRA, and 28.3 percent of those with a SEP or SIMPLE. IRA owners were more likely to be male. In particular, those having a TOFR IRA or a SEP/SIMPLE IRA were much more likely to be male (57.1 percent of TOFR-IRA owners and 58.1 percent of SEP/SIMPLE owners were male, recalculated from Figure 2 for those in the database with a known gender). Just over 45 percent of those owning IRAs had less than $25,000 in their accounts at year-end 2013 (Figure 2). 7 Roth- IRA owners were more likely to have these lower balances (at 43.8 percent), while 35.1 percent of TOFC-IRA owners were in that category (Figure 2). 8 TOFR-IRA owners had the largest percentage of account balances of $100,000 or more at 37.2 percent, while TOFC-IRA and SEP/SIMPLE-IRA owners had the next-highest percentages (33.3 percent and 32.5 percent, respectively). For all IRAs combined, 27.2 percent of individual owners had balances of $100,000 or more. 9 ebri.org Issue Brief May 2015 No

6 Figure 2 Distribution of IRA Ownership, by Various Demographic Characteristics and IRA Type, 2013 (All accounts versus individuals) All Traditional Conts.* Roth Traditional Rlvr* SEP/SIMPLE All Traditional Unknown Acct. Ind. Acct. Ind. Acct. Ind. Acct. Ind. Acct. Ind. Acct. Ind. Acct. Ind. Age Under % 1.4% 0.5% 0.5% 3.1% 3.1% 0.3% 0.4% 0.8% 0.8% 0.4% 0.5% 2.2% 3.1% or older Unknown Gender Female Male Unknown Account Balance Less than $5, $5,000 $9, $10,000 $24, $25,000 $49, $50,000 $99, $100,000 $149, $150,000 $249, $250,000 or more Acct. Accounts; Ind. Individuals. * Traditional Conts.=Traditional Originating from Contributions (TOFC). Traditional Rlvr=Traditional Originating from Rollovers (TOFR). Both of these accounts could have received contributions or rollovers after their origination, so these are NOT proxies for employment-based dollars vs. IRA-only dollars. The Traditional Originating from Rollovers do provide an estimate of the dollars that have been moved into a new IRA. ebri.org Issue Brief May 2015 No

7 Average IRA Balances The average IRA account balance in 2013 was $95,363, while the average IRA individual balance (all accounts from the same person combined) was $119,804 (Figure 3). TOFR IRAs had the highest average individual balance at $150,261, while Roth IRAs had the lowest at $37, The median account IRA balance was $25,438, while the median individual IRA balance was $32,179 (Figure 4). The median TOFR IRA balance was higher than the balances of the other plan types. The overall average and median individual balances (all accounts from the same person combined) were 26 percent higher than the overall average and median account balances. The individual balances exceeded the account balances by smaller percentages for each of the plan types, ranging from 2 percent for the Roth average balances to 6 percent for TOFC IRAs. This suggests that individuals with more than one IRA typically had more than one type of IRA and that not taking into account all IRA holdings would miss at least 26 percent of the average individual s cumulative IRA assets. The average individual IRA balance increased with age for owners ages 25 or older (Figure 5). This balance increased from $12,537 for those ages to $219,790 for those ages 70 or older. The median individual balance also increased with the owner s age. In particular, the median individual balance increased from $3,708 for those under age 25 to $75,627 for those ages 70 or older (Figure 6). Across each plan type, the average and median individual IRA balances increased with the owner s age at least above age 25 (Figure 7). However, for TOFC IRAs, the average balance declined for those ages 70 or older, while the median balance declined for all Traditional IRAs for those ages 70 or older. For individuals ages 40 and older, the average and median balances for TOFR IRAs were higher than for each of the other plan types. 11 Males had higher individual average and median balances than females: $160,589 and $43,449 for males, respectively, vs., $96,339 and $30,660 for females (Figure 8). Across all ages, males had both higher individual average and median balances than females (Figure 9). The median balance for males reached $118,729 for those ages 70 or older, compared with $66,157 for females of that age. Males had larger average and median balances across each of the plan types as well, with the largest differences being among those with a TOFR IRA, at $193,536 average and $61,835 median for males vs. $108,979 average and $34,149 median for females (Figure 10). For Roth IRAs, average and median individual balances were much closer: $45,337 and $17,284 for males vs. $33,998 and $16,037, respectively, for females. Contributions 12 Focusing only on Roth and Traditional IRAs, 11.5 percent of the accounts were contributed to, and 13.8 percent of the individuals owning these IRA types contributed to them in 2013 (Figure 11). Among Traditional-IRA owners, 7.0 percent contributed, while 25.8 percent of those owning a Roth IRA contributed to it. Of those individuals contributing to an IRA in 2013, 43.3 percent contributed the maximum amount. Almost half (46.3 percent) of those contributing to a 13, 14, 15 Traditional IRA contributed the maximum, while 39.9 percent did so with a Roth IRA. When looking at the age of the owners of the IRAs, younger Roth-IRA owners were more likely to contribute to their Roth IRA than were older Roth-IRA owners (Figure 12): 47 percent of Roth accounts owned by those ages received a contribution in 2013, compared with 22 percent of Roths owned by those ages However, the percentage of Traditional IRA accounts being contributed to did not significantly vary by the owner s age, as the percentage receiving a contribution ranged from 13 percent to 6 percent for account owners up through age 69. In contrast, the percentage of those accounts receiving the maximum contribution in both Roth and Traditional IRAs was higher for account owners who were older (Figure 13). For Roth accounts, the percentage receiving the maximum contribution was highest for accounts owned by those over age 45. Specifically, for Roth accounts owned by individuals ebri.org Issue Brief May 2015 No

8 $180,000 Figure 3 Average IRA Balance for All Accounts and Individuals, by IRA Type, 2013 $160,000 $140,000 Accounts Individuals $150,261 $142,587 $134,791 $120,000 $119,804 $112,943 $106,947 $123,195 $100,000 $95,363 $80,000 $77,148 $79,424 $66,950 $60,000 $49,864 $40,000 $36,350 $37,010 $20,000 $0 All Traditional Originating from Contributions* Roth Traditional Originating from Rollovers* SEP/SIMPLE All Traditional Unknown IRA Type * Traditional Conts.=Traditional Originating from Contributions (TOFC). Traditional Rlvr=Traditional Originating from Rollovers (TOFR). Both of these accounts could have received contributions or rollovers after their origination, so these are NOT proxies for employment-based dollars vs.ira-only dollars. The Traditional Originating from Rollovers (TOFR) do provide an estimate of the dollars that have been moved into a new IRA. $50,000 $45,000 $40,000 $35,000 $30,000 Accounts $32,179 $37,468 $37,611 Figure 4 Median IRA Balance for All Accounts and Individuals, by IRA Type, 2013 Individuals $43,535 $42,579 $40,996 $39,401 $25,000 $20,000 $25,438 $20,139 $20,257 $15,000 $15,018 $15,190 $10,000 $5,000 $6,318 $5,095 $0 All Traditional Originating from Contributions* Roth Traditional Originating from Rollovers* SEP/SIMPLE All Traditional Unknown IRA Type * Traditional Conts.=Traditional Originating from Contributions (TOFC). Traditional Rlvr=Traditional Originating from Rollovers (TOFR). Both of these accounts could have received contributions or rollovers after their origination, so these are NOT proxies for employment-based dollars vs.ira-only dollars. The Traditional Originating from Rollovers (TOFR) do provide an estimate of the dollars that have been moved into a new IRA. ebri.org Issue Brief May 2015 No

9 Figure 5 Average IRA Balance for All Accounts and Individuals, by Age, 2013 $250,000 $225,000 Accounts Individuals $212,812 $219,790 $200,000 $175,000 $165,139 $156,581 $175,934 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $12,713 $13,103 $11,527 $12,537 $17,826 $20,456 $28,065 $33,784 $40,398 $49,948 $54,725 $68,683 $72,285 $91,976 $94,156 $122,957 $123,209 $107,644 $126,759 $0 Under or older Unknown Age $90,000 Figure 6 Median IRA Balance for All Accounts and Individuals, by Age, 2013 $80,000 Accounts Individuals $75,277 $75,627 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $3,710 $3,708 $4,856 $5,000 $6,981 $7,661 $10,765 $12,325 $14,441 $17,745 $18,865 $24,264 $24,011 $31,692 $30,239 $41,149 $39,319 $55,807 $51,242 $59,253 $38,738 $45,801 $0 Under or older Unknown Age ebri.org Issue Brief May 2015 No

10 Figure 7 Average and Median Individual IRA Balance, by IRA Type and Age, 2013 Average Median Average Median Average Median Average Median Average Median Average Median All $112,943 $37,611 $37,010 $15,190 $150,261 $43,535 $79,424 $20,257 $134,791 $40,996 $66,950 $6,318 Age Traditional Conts.* Roth Traditional Rlvr* SEP/SIMPLE All Traditional Unknown Under 25 38,291 5,000 10,075 5,273 5,498 1,658 5,880 1,551 26,135 2,802 4, ,389 3,909 14,301 8,167 8,220 2,730 8,377 3,063 10,396 3,142 3,112 1, ,256 5,842 19,768 11,630 18,418 4,934 15,994 5,388 18,539 5,425 5,556 1, ,651 10,113 23,620 13,263 36,231 11,796 28,532 8,578 34,186 11,099 8,632 2, ,418 15,143 26,597 13,995 56,036 20,297 44,600 13,317 52,030 18,086 14,365 2, ,037 21,361 30,138 14,799 79,774 30,700 60,550 18,706 72,287 26,356 21,303 3, ,961 28,646 34,493 16, ,984 43,093 78,189 24,698 97,214 35,588 29,350 4, ,476 38,124 39,928 17, ,159 58,252 99,463 32, ,913 46,648 43,730 6, ,427 50,380 46,815 20, ,748 82, ,066 38, ,095 63,311 67,497 8, ,232 66,410 59,034 23, , , ,962 45, ,546 84, ,707 13, or older 172,007 67,395 89,522 28, , , ,293 48, ,871 84, ,971 18,037 Unknown 114,513 52,167 30,648 14, ,963 43,017 46,854 15, ,820 52, ,288 32,610 * Traditional Conts.=Traditional Originating from Contributions (TOFC). Traditional Rlvr=Traditional Originating Rollovers (TOFR). Both of these accounts could have received contributions or rollovers after their origination, so these are NOT proxies for employment-based dollars vs. IRA-only dollars. The Traditional Originating from Rollovers do provide an estimate of the dollars that have been moved into a new IRA. ebri.org Issue Brief May 2015 No

11 ages 25 29, 37 percent received the maximum contribution, compared with 38 percent for Roth accounts owned by individuals ages 45 49, the lowest percentage for Roth accounts owned by individuals ages 45 or older. The percentage of Traditional IRAs receiving the maximum contribution had a jump up in this percentage for owners ages 35 or older. The percentage of Traditional IRAs receiving the maximum was no lower than 42 percent for owners ages 35 or older compared with at most 35 percent for those accounts owned by individuals younger than age 35. The likelihood of contributing to an IRA did not significantly differ by gender within the database, as both Roth and Traditional IRAs owned by either males or females (as well as those without a gender identified in the database) had similar probabilities of receiving contributions. For example, 6.7 percent of Traditional IRAs owned by females were contributed to in 2013, as were 6.4 percent of accounts owned by males (Figure 14). 16 However, accounting for both types of IRAs, the percentage of accounts receiving a contribution by both genders was 11.4 percent. Furthermore, the percentage of accounts receiving a contribution that received the maximum contribution was also very similar between the genders: 45.0 percent for females and 45.6 percent for males (Figure 15). In 2013 almost 2.6 million IRA accounts in the database were contributed to (Figure 16), and the average amount contributed was $4,145. More than one quarter (25.6 percent) of the accounts receiving contributions were owned by individuals in their 50s. Additionally, more accounts owned by males were contributed to than those owned by females, since there are more male account owners (this is different from the likelihood of contributing, as described above). The average contribution was highest for accounts owned by those ages In fact, there was a steady increase in the average contribution up through that age, with a noticeable jump when the owners reached age 50, where the maximum allowable contribution is higher under the catch-up contribution rules. Accounts owned by males received slightly higher average contributions ($4,260) than did those owned by females ($4,243). More contributions were made to Roth accounts than to all Traditional accounts (both types of Traditional accounts combined into one category) (Figure 16). However, at $4,338, the average contribution to a Traditional account was higher than the $4,009 to a Roth account. Yet, a higher overall aggregate amount was contributed to Roth IRAs ($6.08 billion for Roths, compared with $4.61 billion for Traditional accounts) due to the fact that there were substantially more Roth owners making any level of contribution. Roth IRAs had a higher percentage of younger individuals contribute to them, as 23.9 percent of the Roth accounts receiving contributions were owned by individuals ages In contrast, only 7.5 percent of the Traditional accounts that received contributions were owned by those ages Furthermore, both Roth and Traditional accounts receiving contributions were more frequently owned by males, and the average contribution was higher for male account owners to both of the IRA types, albeit at a very small amount. Even when accounting for age, the average contributions to accounts owned by males were larger than those to accounts owned by females, except for those ages and 70 or older (Figure 17), although at some ages the average contributions were nearly equal. Yet, the age distributions for the male- and female-owned accounts that received contributions were very similar. For example, 28.3 percent of the female-owned accounts that received a contribution were owned by those in their 50s, compared with 25.8 percent of the male-owned accounts that received a contribution. Rollovers When comparing contributions to IRAs with rollovers to IRAs, rollovers overwhelmingly outweighed new contributions in dollar terms. While almost 2.6 million accounts in the database received contributions compared with the 1.7 million accounts that received rollovers in 2013, 14.5 times the amount of dollars were moved to IRAs through rollovers than were contributed to IRAs (Figure 18). This is not surprising, given the annual contribution limit of $5,500 ($6,500 for those ages 50 or older) to IRAs in 2013, relative to the theoretically unlimited amount that could be added via a rollover. Almost 30 percent of contributions made to IRAs were in the $5,501 to $6,500 range (the maximum amount allowed) compared with 74.3 percent of the rollovers being $5,000 or larger (including 9.4 percent of $250,000 or more). ebri.org Issue Brief May 2015 No

12 $180,000 Figure 8 Average and Median IRA Balance for All Accounts and Individuals, by Gender, 2013 $160,000 $160,589 Female Male Unknown $140,000 $120,000 $125,348 $100,000 $96,339 $91,853 $80,000 $77,385 $75,004 $60,000 $40,000 $20,000 $24,650 $33,471 $18,319 $30,660 $43,449 $23,576 $0 Accounts Individuals Accounts Individuals Average Median Figure 9 Average and Median Individual IRA Balance, by Gender and Age, 2013 Female Male Unknown Average Median Average Median Average Median All $96,339 $30,660 $160,589 $43,449 $91,853 $23,576 Age Under 25 14,497 4,748 15,250 4,826 10,373 2, ,689 5,014 14,828 5,816 9,745 3, ,880 8,129 23,970 9,386 16,609 5, ,860 12,857 39,807 14,520 28,036 9, ,158 17,869 60,419 21,523 40,815 13, ,245 23,756 84,738 30,743 53,603 17, ,057 30, ,178 42,087 68,540 21, ,786 39, ,408 56,323 89,413 27, ,516 50, ,045 79, ,969 38, ,653 64, , , ,715 53, or older 164,747 66, , , ,016 51,995 Unknown 70,399 19,947 91,937 19, ,248 46,166 ebri.org Issue Brief May 2015 No

13 $250,000 Figure 10 Average and Median Individual IRA Balance, by IRA Type and Gender, 2013 $200,000 $176,984 $193,536 Roth SEP/SIMPLE All Traditional $150,000 $100,000 $50,000 $33,998 $57,698 $104,961 $92,836 $108,979 $70,904 $45,337 $99,810 $137,217 $122,476 $27,190 $57,458 $108,301 $107,873 $102,690 $65,042 $16,037 $15,381 $34,203 $32,505 $34,149 $15,776 Traditional-Conts.* Traditional-Rlvr* Unknown $17,284 $27,513 $52,636 $40,728 $61,835 $27,401 $11,870 $13,385 $37,234 $39,914 $24,006 $6,044 $0 Female Male Unknown Female Male Unknown Average Median * Traditional Conts.=Traditional Originating from Contributions (TOFC). Traditional Rlvr=Traditional Originating Rollovers (TOFR). Both of these accounts could have received contributions or rollovers after their origination, so these are NOT proxies for employment-based dollars vs. IRA-only dollars. The traditional-originating from rollovers do provide an estimate of the dollars that have been moved into a new IRA. 50% 45% 40% Figure 11 Percentage of Those Owning a Traditional* or Roth IRA Who Contributed to It, and the Percentage of Those Contributing Who Contributed the Maximum Allowable Amount, by All Accounts and Individuals, 2013 All Traditional* Roth 46.3% 44.7% 43.3% 41.8% 39.7% 39.9% 35% 30% 25% 25.4% 25.8% 20% 15% 10% 5% 11.5% 13.8% 6.5% 7.0% 0% Accounts Individuals Accounts Individuals Contributing Of Those Contributing Who Contributed the Maximum * Traditional IRAs in this figure include all Traditional IRAs. ebri.org Issue Brief May 2015 No

14 Figure 12 Percentage of Traditional* or Roth IRA Accounts That Received a Contribution, by Age of Account Owner, % 50% 51% 47% All Roth Traditional* 41% 40% 37% 30% 30% 28% 20% 10% 0% 24% 23% 24% 24% 22% 22% 21% 16% 15% 13% 14% 12% 12% 12% 9% 10% 9% 8% 9% 8% 8% 8% 8% 7% 8% 6% 6% 3% 3% 2% Under or older Unknown * Traditional IRAs in this figure include all Traditional IRAs. 60% 50% 40% Figure 13 Percentage of Traditional* or Roth IRA Accounts That Received a Contribution That Received the Maximum Allowable Contribution, by Age of Account Owner, % 37% 36% 36% 35% 37% 34% 42% All Roth Traditional* 39% 34% 45% 42% 38% 46% 43% 41% 45% 47% 47% 47% 49% 52% 47% 50% 55% 46% 54% 53% 56% 30% 27% 27% 26% 27% 20% 10% 0% Under or older * Traditional IRAs in this figure include all Traditional IRAs. ebri.org Issue Brief May 2015 No

15 30% Figure 14 Percentage of Traditional* or Roth IRA Accounts That Received a Contribution, by Gender of Account Owner, % Female Male Unknown 25% 23.7% 25.0% 20% 15% 11.4% 11.4% 11.8% 10% 6.7% 6.4% 6.2% 5% 0% All Traditional* Roth * Traditional IRAs in this figure include all Traditional IRAs. 60% Figure 15 Percentage of Traditional* or Roth IRA Accounts That Received a Contribution That Received the Maximum Contribution, by Gender of Account Owner, 2013 Female Male Unknown 50% 45.0% 45.6% 49.1% 49.5% 41.9% 43.0% 40% 30% 31.8% 31.0% 32.3% 20% 10% 0% All Traditional* Roth * Traditional IRAs in this figure include all Traditional IRAs. ebri.org Issue Brief May 2015 No

16 The average and median rollover amounts to Traditional IRAs were $96,660 and $27,967, respectively, and to Roth IRAs were $22,915 and $8,291 (Figure 19). In addition, nearly 1.6 million rollovers to Traditional IRAs occurred in 2013 compared with 0.1 million rollovers to Roths. Average and median rollover amounts increased with the owner s age through age 69 for Traditional IRAs and ages 70 or older for Roth IRAs (except for the median decline for ages 45 49), respectively. Furthermore, the average and median rollover amounts from male-owned accounts were higher than those from female-owned accounts, e.g., for Traditional IRAs, $120,414 and $34,363, respectively for males, compared with $74,774 and $21,441 for females (Figure 19). Controlling for age, the average and median rollover amounts to Traditional IRAs were still higher among male account-owners than among female account-owners (Figure 20). The age distribution of those making a rollover was very similar between males and females. The distribution of rollover dollars and distribution of the number of rollovers are dramatically different for Traditional IRAs. Nearly 13 percent of the rollovers in 2013 were less than $2,000, but the value of those rollovers represented only 0.1 percent of the assets rolled over to Traditional IRAs in 2013 (Figure 21). In contrast, 10.2 percent of the rollovers were $250,000 or more, but the value of those rollovers represented 57.2 percent of the assets rolled to Traditional IRAs. However, for rollovers to Roth IRAs, the distribution of the values of the rollovers was not as skewed to the largest rollover amounts (Figure 22). For example, 23.0 percent of the rollovers to Roth IRAs were in the amount of $10,000 $24,999, but these represented 16.0 percent of the value of the dollars rolled over to IRAs. The value of the largest rollovers to Roth IRAs was 16.4 percent of the dollars rolled over. Comparison of Account Balances and Contributions While each year s database is a unique snapshot (cross section) of that year s IRA balances and contributions, it is informative to compare the results between years to consider changes in account balances and contribution trends. The first comparison conducted is by examining each year s snapshot. The second comparison focuses only on those individuals who have an account in the database in each year of the analysis ( ). This not only allows the analysis to focus on the activity within these accounts over an extended period of time, but also controls for changes in the aggregate and averages resulting from the additions and subtractions from the database because of new data providers into the database, as well as accounts being closed. Furthermore, the distribution of the growth in the balances across each account holder in the study can be deduced, as well as the persistence of contributions by these individuals. 17 Snapshot Comparison The average balance for each year s full sample decreased from $91,864 in 2010 to $87,668 in 2011 before increasing to $105,001 in 2012 and $119,804 in 2013 an increase of 30.4 percent from 2010 to 2013, and 14.1 percent from 2012 to 2013 (Figure 23). The median followed the same pattern, going from $25,296 to $23,785 to $27,987 to $32,179, representing increases of 27.2 percent between 2010 and 2013, and 15.0 percent between 2012 and This same down-then-up pattern in average balances occurred for each gender and among Traditional IRAs. However, the average balance continued up in for those accounts owned by 35- to 49- year-olds. Above that age, the pattern of a decrease in average balance in 2011 and an increase in average balance in 2012 and 2013 resulted. Below age 35, another year of declines resulted before increasing in The average balance for Roths and SEP/SIMPLEs increased each year. The percentage of individuals who contributed to their IRA in each year was relatively consistent across years at 12.1 percent in 2010, 13.2 percent in 2011, 13.1 percent in 2012, and 13.8 percent in 2013 (Figure 24). The percentage of individuals owning Traditional IRAs who contributed to them rose from 5.2 percent in 2010 to 7.0 percent in In contrast, Roth owners had the highest percentage contributing in 2011: 26.0 percent, compared with 24.0 percent in 2010 and 25.1 percent in 2012, before an increase to 25.8 percent in While the percentage of individuals contributing remained relatively consistent across the four years, the percentage of contributors who contributed the maximum rose from 43.5 percent in 2010 to 53.5 percent in 2012 (Figure 24). Increases during that time occurred for each IRA type, with owners of Traditional IRAs having higher likelihoods of ebri.org Issue Brief May 2015 No

17 Figure 16 Distribution of the IRAs Receiving Contributions, by IRA Type and Age and Gender of Account Owner, 2013 All Contributions Traditional Contributions* Roth Contributions Number Percent Average Total Number Percent Average Total Number Percent Average Total (in thousands) (in millions) (in thousands) (in millions) (in thousands) (in millions) All 2, % $4,145 $10, % $4,338 $4,611 1, % $4,009 $6,080 Age Under , , , , , , , , , , , , , , , ,827 1, , , ,533 1, , , ,776 1, , , ,948 1, , , , , , or older , , , Unknown , , , Gender Female ,243 3, ,435 1, ,099 2,011 Male 1, ,260 4, ,455 1, ,122 2,517 Unknown ,846 2, ,016 1, ,737 1,552 * Traditional IRAs in this figure include all Traditional IRAs. ebri.org Issue Brief May 2015 No

18 contributing the maximum in each year. However, in 2013, with the increase in the maximum allowable contribution, the percentage contributing the maximum overall fell from 53.5 percent in 2012 to 43.3 percent in Similar percentage-point drops occurred for both Traditional and Roth IRAs. The average contribution increased each year including In 2010, the average contribution was $3,335, increasing to $3,723 in 2011, to $3,904 in 2012, and to $4,145 in 2013 (Figure 25). This increase in the average contribution occurred for each known age and gender group of the contributing owners of IRAs. Furthermore, the average contribution increased with the age of the IRA owners through ages for each year, with the exception of 2011, when the increase stopped at ages and in 2010 for those ages Consistent Sample Comparison In order to compare the experience of the same account owners longitudinally, only the individuals owning an IRA with a positive account balance in the database in each year ( ) were included to form a consistent sample of individuals. 18 Each individual s accounts were studied to determine the change in his or her IRA balances and contribution behavior during This provides a more accurate picture of account growth, rather than relying on aggregate database totals, which might include new individuals or might exclude individuals who no longer have an account. This allows for a better understanding of how accounts grow for those maintaining their IRAs, as well as the contribution activity. For this consistent sample, the overall average balance increased each year from $89,427 in 2010, to $90,232 in 2011, to $101,649 in 2012, and to $118,185 in 2013 (Figure 26). This increase occurred across each known owner age group and IRA type, except for owners ages 70 or older and for TOFR owners, who experienced a decline of their balances in 2011 preceding increases in 2012 and Average balances for each gender grouping also increased each year. The median values also followed a continual upward trend across all IRA owners, except for those ages 70 or older and for TOFR IRAs. The comparison of the averages and medians, while instructive, does not show the distribution of the changes in the individuals IRA balances, an important consideration as different individuals could experience significantly different changes between years, particularly in view of the varying levels of contributions to and withdrawals from the accounts as well as the asset allocation within the accounts. Using the experiences of these same individuals in the consistent sample, the 25 th percentile, median, and 75 th percentile of the resulting percentage changes of these individuals balances are presented in Figure 27. The median percentage change in the account balances for all individuals was an increase of 33.6 percent from 2010 to This means that half of the individuals had an increase greater than that amount and the other half either had a smaller increase, no change, or a decline. Furthermore, at the 25 th percentile, a 2.6 percent increase resulted, meaning that 25 percent of the individuals who consistently owned an IRA had an increase smaller than 2.6 percent. The highest (fourth) quartile of balance changes experienced growth surpassing 57.1 percent. The growth rates for Roth IRA balances were higher both overall and for each age and gender. The median Roth IRA increase was 51.6 percent from 2010 to 2013, compared with 28.3 percent for all Traditional IRAs. A major factor in these different rates of increase was that new contributions make up a larger portion of the Roth IRAs than they do for Traditional IRAs, which magnified the impact of contributions. The significant differences in the distribution of percentage change in the balances at ages 70 or older is due to the required minimum distribution (RMD) rules that require individuals to make withdrawals out of Traditional IRAs starting April 1 of the year following the calendar year in which they reach age 70-½. These rules do not apply to Roth IRAs, which explains the continued increases found at this age for the Roth owners. Even with the required withdrawals, more than half of these Traditional owners had balances in 2013 that were larger than they were in 2010, meaning that the returns they received during those years were equal to, or larger than, the amount they may have withdrawn. 19 As would be expected given the distribution of the percentage changes in the account balances, the distribution of the account balances has shifted to higher-balance categories from 2010 to 2013 (Figure 28). In 2010, 21.2 percent of the individuals in the consistent sample had balances of less than $5,000. By 2013, this number was down to 18.7 percent. ebri.org Issue Brief May 2015 No

19 Figure 17 Distribution of Traditional* and Roth IRAs Receiving Contributions, by Age and Gender of Account Owner, 2013 Female Male Unkown Number Percent Average Total Number Percent Average Total Number Percent Average Total (in thousands) (in millions) (in thousands) (in millions) (in thousands) (in millions) All % $4,243 $3,639 1, % $4,260 $4, % $3,846 $2,621 Age Under , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , or older , , , Unknown , , , *Traditional IRAs in this figure include all Traditional IRAs. Figure 18 Distribution of Contribution and Rollover Amounts to Traditional* and Roth IRAs, 2013 Number Percent (in thousands) Contributions All 2, % Less than $1, $1,000-$1, $2,000-$3, $4,000-$5, $5,501-$6, Total Contributions (in millions) $10,691 Rollovers All 1, Less than $2, $2,000-$4, $5,000-$9, $10,000-$24, $25,000-$49, $50,000-$74, $75,000-$99, $100,000-$149, $150,000-$249, $250,000 or more Total Rollovers (in millions) $155,674 * Traditional IRAs include all Traditional IRAs. ebri.org Issue Brief May 2015 No

20 Figure 19 Distribution of Traditional* and Roth IRAs That Received a Rollover, by Age and Gender of Account Owner, 2013 Traditional* Roth Number Percent Average Median Total Number Percent Average Median Total (in thousands) (in millions) (in thousands) (in millions) All 1, % $96,660 $27,967 $152, % $22,915 $8,291 $3,059 Age Under ,667 1, ,076 1, ,314 3, ,689 4, ,159 7,647 2, ,428 5, ,851 15,254 4, ,714 7, ,373 22,347 7, ,838 7, ,206 27,600 10, ,749 7, ,616 32,651 16, ,209 8, ,383 42,377 24, ,808 10, ,269 59,552 35, ,349 13, ,888 61,501 28, ,446 15, or older ,097 49,520 20, ,184 16, Unknown ,068 34,861 1, ,038 9, Gender Female ,774 21,441 33, ,692 6, Male ,414 34,363 72, ,909 8,620 1,357 Unknown ,904 27,967 46, ,109 9,949 1,137 * Traditional IRAs in this figure include all Traditional IRAs. Figure 20 Distribution of Those Rolling Over to a Traditional* IRA, by Age and Gender, 2013 Female Male Unkown Number Percent Average Median Total Number Percent Average Median Total Number Percent Average Median Total (thousands) (millions) (thousands) (millions) (thousands) (millions) All % $74,774 $21,441 $33, % $120,414 $34,363 $72, % $87,904 $27,967 $46,547 Age Under ,931 1, ,081 1, ,934 1, ,114 3, ,852 3, ,769 3, ,910 6, ,492 9,070 1, ,561 7, ,963 13,165 1, ,124 17,966 1, ,203 14,727 1, ,022 18,207 1, ,203 27,121 3, ,031 21,210 2, ,322 21,474 2, ,689 33,936 4, ,435 26,911 3, ,067 25,387 3, ,607 41,004 7, ,671 31,066 4, ,398 32,533 5, ,350 54,836 12, ,027 39,156 6, ,244 47,316 7, ,449 78,380 18, ,725 54,282 9, ,653 49,030 5, ,566 77,999 13, ,352 59,555 9, or older ,847 38,681 3, ,521 54,017 8, ,308 50,775 8,025 Unknown ,152 11, ,040 7, ,218 34,982 1,141 * Traditional IRAs in this figure include all Traditional IRAs. ebri.org Issue Brief May 2015 No