More than one-quarter of all retirement savings is held in individual retirement accounts (IRAs), yet most traditional IRA investors did not add money to their accounts in 2007, and even fewer did so in 2008, according to a report by the Securities Industry and Financial Markets Association and the Investment Company Institute (ICI). IRAs account for $4.2 trillion in assets, and 11.2 percent of investors contributed in 2007, while 9.4 percent added to their accounts in 2008. According to the study, investors who regularly added money were the least likely to stop when the market tumbled in 2008, with 63 percent of those who contributed the previous year saying they continued making deposits.
IRAs are excellent vehicles for retirement savings, and with the future of government assistance in doubt and pensions being squeezed by the financial crisis, personal saving is more important than ever. In addition, considering the tax-deferred advantages of IRAs in light of future tax rate increases, adding savings to IRAs makes more sense than ever.
To view the report, please click on the following link to the ICI website: The IRA Investor Profile.
Gregg D. Killoren
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