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Data & Research March 13, 2014
Americans Overlook IRAs
Most American workers spend less time per year managing an individual retirement account (IRA) than it takes to choose a restaurant on a special occasion, according to an annual survey.
Reported by PLANADVISER staff
The survey, aptly titled the “TIAA-CREF IRA Survey,” shows that fewer than two in 10 (17%) working American adults make regular contributions to an IRA, down from 22% in 2012. Workers age 45 to 54 are the most likely to contribute to an IRA regularly, at 30%, followed by workers in Generation X (20%) and Generation Y (11%).
Survey respondents say they are more likely to spend two or more hours selecting a restaurant for a special occasion (25%) or shopping for a flat screen TV (21%) or tablet computer (16%) than planning an IRA investment (15%). Even among those who already have an IRA, more than half (55%) say they spent less than an hour planning for the investment.
In addition, the number of Americans who would consider an IRA as part of their retirement strategy has fallen sharply since 2013. Fewer than half (47%) of those not contributing say they would consider starting an IRA in 2014, down from 57% last year.
One encouraging result from the survey shows a majority (60%) of respondents who contribute to an IRA are also putting money aside through an employer-sponsored retirement plan, such as a 401(k) or 403(b).
Among those with both an IRA and an employer-sponsored plan, a little more than half (53%) say they contribute to their IRA regardless of whether they’ve reached their employer-sponsored plan’s employer match limit or employee contribution limit, which means they could be leaving money on the table.
An executive summary of the survey is available here.