IRA Owners Who Interact with Advisers Most Likely to Make Regular Contributions

Owners of individual retirement accounts (IRAs) who interact with an adviser or financial services company are more likely to make regular contributions to their account, according to a survey by the LIMRA Secure Retirement Institute (LIMRA SRI). Only 34% of IRA owners currently make regular contributions to their account.

Among those who are making regular contributions, 53% were approached by a financial services professional or company to set that up.

Only 34% of Americans think they are knowledgeable about IRAs. Forty-two percent of men say they are knowledgeable about IRAs, but only 27% of women say the same. Only 41% of Americans own either a traditional or Roth IRA—with 32% owning a traditional IRA, 19% owning a Roth and 9% owning both.

Among those who do not own an IRA, 46% say it is because they do not understand enough about them.

The survey found that older Americans are more likely to own traditional IRAs. Forty-eight percent of the Silent Generation, those above the age of 73, own a traditional IRA, compared to only 30% of Boomers, Gen Xers and Millennials.

Ownership of Roth IRAs is much more level across age groups, with 19% of Boomers, 19% of Gen Xers, 18% of Millennials and 16% of the Silent Generation, owning a Roth IRA. Forty-three percent of these consumers say they bought a Roth IRA on the recommendation of their financial adviser, and 30% said they bought a Roth IRA to have a mix of pre- and post-tax retirement savings.

In contrast, only 23% of those owning a traditional IRA said they did so on the recommendation of their adviser.