Health Insurance Coverage of the Near Elderly, 1994-2005; and IRA Assets, Contributions, and Market Share

January 2007, Vol. 28, No. 1
Paperback, 16 pp.
PDF, 740 kb
Employee Benefit Research Institute, 2007

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Executive Summary

Health Insurance Coverage of the Near Elderly, 1994-2005

 • Least likely to be uninsured: Adults ages 55-64 (the “near elderly”) were one of two groups (the other was children) most likely to have health insurance coverage in 2005. That year, 13.6 percent of adults ages 55-64 were uninsured, compared with 34.9 percent of adults 21-?24, 26.6 percent of those ages 25-?34, and 25 percent of younger adults.

Near elderly uninsured likely to grow in the future: However, future retired adults ages 55-64 may experience an increase in the likelihood of being uninsured if employer cutbacks to retiree health benefits affect them and they have no other means of obtaining health insurance. Also, the size of the uninsured population ages 55-64will also grow as the baby boom generation ages.

Benefits erosion, Medicare costs a growing concern: The erosion of retiree health insurance may ultimately change retirement patterns as employees nearing retirement age postpone their decision to retire upon learning that, without a job, they may not be able to obtain health insurance coverage or afford health care services that are not covered by insurance. The health insurance status of the population nearly eligible for Medicare also has implications for Medicare, since a growing uninsured population entering the program will result in higher costs.

IRA Assets, Contributions, and Market Share

IRAs biggest share of private-sector retirement assets: Individual retirement account (IRA) assets surpass those held in either private-sector defined contribution plans (typically, 401(k)-type plans) or defined benefit plans (pensions), and are likely to become the single largest source of retirement assets outside of Social Security for private-sector workers in retirement. In 2005, IRA assets increased to a new high of $3.67 trillion.

Mutual funds, brokerages hold most IRA market share: Growth in IRA assets occurred mostly in mutual funds and self-directed brokerage accounts, at the expense of banks and thrifts.

Roth vs. traditional IRAs: Traditional IRAs hold about 92 percent of all IRA assets, driven by rollovers from other plans, but Roth (tax-free at withdrawal) IRAs account for more new contri-butions (31 percent) than traditional IRAs.

Higher contribution limits: The percentage of eligible taxpayers making an IRA contribution remained essentially unchanged at 10.5 percent from 2001 to 2002, indicating that higher contribution limits did not bring in new IRA participants. But the average contribution increased by over $500, indicating the higher limits made a difference for those who use these vehicles.