Women are lagging far behind men when it comes to accumulating assets in IRAs: The average male owns $153,649 in assets within 401(k)s. The average female owns just $94,774. The difference is also significant looking at median numbers: The median average balance across all IRA accounts for the average male is $41,057, while the median balance for women is just $29,651.
The report, entitled 2014 Update of the EBRI IRA Database: IRA Balances, Contributions, Rollovers, Withdrawals and Asset Allocation (EBRI Issue Brief) no. 424 was the latest update in ongoing research based on a database of 26.7 million accounts and 21.1 million unique taxpayers. The total amount of assets within IRA accounts were roughly $2.69 trillion.
Among the study’s other findings:
- Asset allocation to stocks was relatively even among investors of all ages. Those aged 45 to 54 had the highest allocation to stocks, at 62 percent. But even those in their 80s and older retained an exposure to equities of over 53 percent.
- Bond allocations peak with the over 85 crowd at 20.1 percent. Those entering retirement at age 65-69 held less than 18 percent of their assets in bonds while holding 52.9 percent in stocks – suggesting that today’s crop of near retirees is taking on more equity risk than prior generations. But yields on bonds tend to be lower than they were a decade or two ago, providing less of an incentive to hold them.
- Only about 12 percent of all the IRAs that EBRI looked at received an active contribution in 2014. People were making active contributions to about one in four Roth IRA accounts, but only 6.4 percent of traditional IRA accounts.
- The average balance in any given IRA, according to a new study by the Employee Benefit Research Institute, is slightly over $100,000. But since many people own multiple IRAs, the average account balance per IRA owner is much higher: The average U.S. taxpayer has $127,583 in total IRA assets, according to their research.
- About one in four IRA owners took a withdrawal or distribution during 2014. Much of the withdrawal activity was driven by required minimum withdrawals (RMD)s, which affect traditional IRA owners who have reached the age of 70½. Among taxpayers under age 60 – the first full year in which they don’t have to pay a 10 percent excise tax on early withdrawals from IRAs, fewer than 12 percent took a withdrawal.
- The average withdrawal amount from traditional IRAs varied with age. Those younger than age 30 who took a distribution withdrew $9,177. Those between ages 60 and 64 withdrew an average of $29,082. Withdrawals began to decline after age 65, perhaps in part because of the effect of Social Security income. The average individual age 71 or older took $17,900 from IRAs each year.
- The average withdrawal rate from traditional IRAs was 5.8 percent. But the average withdrawal rate for those taking a withdrawal from Roth IRAs was almost 22 percent. Younger people are more likely to own Roths, and many of their withdrawals were early withdrawals, presumably for emergencies, and as younger Americans were from relatively lower balances. As balances grow, median withdrawal rates for Roth and traditional IRAs balance out.
- Roth IRAs were slightly less likely to have had a distribution taken from them than traditional IRAs. However, about one out of four traditional IRA owners took withdrawals that were for more than required under RMD rules.
When it comes to Finances, Different Demographics Invest Differently
Interested individuals can find the full Issue Brief at EBRI’s website here.