EBRI Notes

IRA Assets and Contributions, 2006; and Income of the Elderly Population Age 65 and Over, 2006

Dec 11, 2007 16  pages


IRA Assets and Contributions, 2006:

Record assets in 2006: Individual retirement account (IRA) assets reached a record $4.23 trillion in 2006, a growth rate of 16.5 percent from 2005, resuming a trend that was interrupted only by the stock market retrenchment from 2000–2002.

Rollovers still account for most growth: IRA growth continues to be fueled by rollovers from employment-based tax-qualified retirement plans (amounting to about $200 billion annually). Contributions to IRAs pale in comparison.

Changing market share: The growth in IRA assets has been mostly in mutual funds and self-directed brokerage accounts, with market share shrinking in banks, thrifts, and life insurance annuities. Almost half (47 percent) of all IRA assets were held in mutual funds in 2006.

IRAs the largest repository of retirement funds: Total IRA assets are larger than those in either private-sector defined benefit (pension) or defined contribution (401(k)-type) retirement plans.

Traditional IRAs still dominant: More than 90 percent of all IRA assets were held in traditional IRAs in 2002 (the latest available), compared with 3 percent in Roth IRAs and just over 5 percent in other IRAs.

Income of the Elderly Population Age 65 and Over, 2006

Modest income levels: Median (midpoint) annual income for the elderly population was $16,770 in 2006. Median income of the elderly increased at an average annual rate of 1.0 percent from 1989–1999 and by 0.34 percent from 1999–2006.

Gender Differences: Women receive a larger share of their income (47.8 percent in 2006) from Social Security than men (34.0 percent in 2006). The percentage of an elderly woman’s and elderly man’s income coming from Social Security has changed little over time: In 1975, 36.0 percent of an elderly man’s income came from Social Security compared with 52.0 percent for an elderly woman.

Age Differences: The older a person is, the greater share of his or her income comes from Social Security. In 2006, 30.1 percent of an elderly person’s (age 65–69) income came from Social Security, compared with 54.3 percent for a person age 85 and over.