How IRA Owners Do Retirement Planning Right

retirement, IRA, 401k, rollover, ICI

A clearer picture of retirement savers.

If you have an IRA, you (most likely) have a retirement plan. More than two-thirds of U.S. households with traditional individual retirement accounts said they have a strategy for managing their income and assets in retirement, according to a new Investment Company Institute (ICI) survey.

These households’ planning strategies include:

More than two-thirds of traditional IRA-owning households that indicted they have a strategy took three or more steps in developing it.

The study also found that traditional IRA-owning households sought information from a variety of sources when developing their retirement income and asset management strategy.

Among those households with a strategy, 74 percent consulted a professional financial adviser, 24 percent used a website, 24 percent consulted with friends or family, 22 percent consulted a book or article in a magazine or newspaper, and 7 percent used a financial software package.

Traditional IRA growth fueled by rollovers

The study also found that 59 percent of U.S. households with traditional IRAs in mid-2019, or 21 million U.S. households, had accounts that included rollover assets from employer-sponsored retirement plans.

When asked about their most recent rollover, the vast majority (86 percent) of these households reported that they had transferred the entire retirement plan account balance into the traditional IRA, rather than withdrawing any portion of the account.

Nearly nine in 10 traditional IRA-owning households with rollovers made their most recent rollover in 2000 or later, including 63 percent who made their most recent rollover since 2010.

Other key findings of the report include:

The majority of traditional IRA withdrawals in tax year 2018 were made by retirees. Eighty-eight percent of households that made traditional IRA withdrawals were retired and only 5 percent of traditional IRA–owning households headed by individuals younger than 59 took withdrawals

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