IRA Equity Allocation Up, Says Study

By ASPPA Net Staff • September 21, 2015 • 0 Comments
IRA investments were more heavily allocated to stock equities in 2013, says “IRA Asset Allocations 2013, and Longitudinal Results, 2010-2013,” a study recently released by the Employee Benefits Research Institute (EBRI). The data is derived from approximately 26 million IRAs; 2013 is the most recent year for which it is available.

Highlights of the study results include:

  • Equity allocations grew over the 2010-2013 period regardless of gender, age or IRA type.

  • Equity allocations rose by 7.7 percentage points from 2011 to 2012, from 44.4% to 52.1%; 2013 continued the trend, with allocations rising to 54.7%.

  • 22% of IRAs had less than 10% allocation to equities.

  • 34% of IRAs had more than 90% allocation to equities; Roths were the most likely to be that heavily invested in them.

  • Roth IRAs showed the highest allocations; traditional IRAs and those that were older generally had lower allocations.

  • While equity allocations rose, IRA investment in bonds fell. Bond allocations fell during the period in bonds fell, EBRI says. Bond allocation fell in all demographic groups. They stood at 16.1% in 2012, and dropped nearly 4 percentage points in just one year to 12.4% in 2013.

Bond investments may have fallen overall, but it was not entirely uniform. EBRI also found that the percentage of IRA funds allocated to bonds was higher as the age of their owners increased.

Allocations in money market mutual funds and certificates of deposit were relatively uniform, generally between 20% and 27%, and were highest among those with balances of $10,000 or less.