Individual Retirement Account Balances, Contributions, Withdrawals, and Asset Allocation Longitudinal Results 2010-2014: The EBRI IRA Database

This paper, using the EBRI IRA Database, specifically examines the trends in account balances, contributions, withdrawals, and asset allocation in IRAs from 2010-2014. Results from both the annual cross-sectional sample and a consistent sample of IRA owners who have been in the database in each year from 2010-2014 are presented. This allows for the investigation of the behavior in IRAs that are continuously maintained, instead of the results being affected by new and former IRA owners. Significantly higher growth in account balances was found in the consistent sample of IRA owners compared with the annual cross-sectional sample. While the cross-sectional overall average account balance increased 38.9 percent from 2010 to 2014, the increase for those IRA owners who continuously owned IRAs from 2010-2014 was 45.8 percent. There are considerable differences by IRA type whether IRA owners who have maintained their IRA for five years (consistent account owners) are likely to contribute, as well as the number of years they contribute. Among Traditional IRA owners, 87.6 percent did not contribute to the IRA in any year, while 2.1 percent contributed in all five years. In contrast, 61.5 percent of Roth IRA owners did not contribute in any year and 10.4 percent contributed in all five years. Roth IRA owners ages 25-29 were the most likely to contribute in at least one year and in all five years, at 61.3 percent and 16.0 percent, respectively. Among consistent account owners, the percentage of individuals taking a withdrawal from a Traditional or Roth IRA rose from 12.9 percent in 2010, to 15.4 percent in 2011, to 16.7 percent in 2012, to 18.5 percent in 2013, and to 19.6 percent in 2014. This pattern is the result of the increasing percentage of individuals in this sample surpassing the required minimum distribution (RMD) age each year due to the same individuals being in the sample from year to year. Moreover, the likelihood of taking a withdrawal increased with age. For the annual cross-sectional snapshot, the percentage allocated to equities decreased from 45.7 percent in 2010 to 44.4 percent in 2011 before a sharp increase in 2012 to 52.1 percent, to 54.7 percent in 2013, and to 55.7 percent in 2014. The amount allocated to balanced funds was constant from 2010 to 2011 before a slight decline in 2012 and an even smaller uptick in 2013 and in 2014, while the percentage in money increased in 2011 and fell through 2014. Consistent account owners moved toward higher equity holdings from 2010-2014. The equity allocations in 2014 were overall higher than the values in 2010 across all groups studied.