EBRI: Rollovers Fuel Growth in IRA Assets

By Fred Barstein • May 22, 2014 • 0 Comments

While assets in IRAs are larger than those in DC plans, the vast majority of their growth comes from rollovers, according to research from EBRI. The EBRI database covers $2.09 trillion of the ICI-estimated $5.6 trillion in IRAs as of the end of 2012 and includes 25.3 million accounts for 19.9 million individuals in 2012. Of the 2.4 million accounts that received contributions, 1.3 million came from rollovers — but those accounts had 10 times the amount of contributions. 

Some are raising questions, including:

  • whether last year’s FINRA notice reminding members that suitability applies to whether investors should roll out of their plans will limit rollover activity; and 
  • whether the DOL’s redefinition of fiduciary rule will limit commissioned-based brokers from working on rollovers.

Other highlights from EBRI’s IRA database:

  • The average account balance in 2012 was $81,660, and $105,001 when individuals’ multiple accounts are combined.
  • Average account balances for those in the EBRI database for three years increased from $95,431 in 2010 to $106,205 in 2012.
  • At $139,467, men had a higher average account balance than women, which stood at $81,700 in 2012.

Younger people are more likely to invest in Roth IRAs: 43 percent for those 25-29 versus 21 percent for those 60-64.

Fred Barstein is the Portal Conductor of the NAPA Service Providers Station.  He is also NAPA Net’s Editor in Chief.