Data & Research September 11, 2008

IRA Assets Reach $4.75T

Total assets in individual retirement accounts (IRAs) grew 12.5% in 2007, reaching a record $4.75 trillion, according to a study released Thursday by the Employee Benefit Research Institute (EBRI).
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According to EBRI, while the percentage growth was lower than the 15.6% recorded in 2006, it was the fifth consecutive year of double-digit IRA growth. Total IRA assets in 2007 were larger than those in other retirement plan types—private-sector, defined contribution (401(k)-type) plans held $3.49 trillion, and private-sector, defined benefit plans held $2.33 trillion in 2007.

The EBRI analysis notes that, while IRAs are likely to be the largest non-Social Security asset in retirement for many Americans in the next generation of retirees (Baby Boomers and beyond), only 10% of taxpayers eligible to contribute to an IRA actually do so. Rollovers from other types of retirement plans, not new contributions, primarily fuel IRA growth.

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The majority of assets (about 90%) are held by traditional IRAs, but most new contributions are going into Roth and other types of IRAs.

In addition, EBRI found that mutual funds and brokerage accounts now dominate the IRA market, holding 47% and 38% of assets, respectively. Life insurance companies and banks/thrifts hold 8% and 7% of assets, respectively.

The study is found in the September 2008 EBRINotes, available at www.ebri.org.

Products September 10, 2008

Transamerica Helps Pre-Retirees Prepare for Second Career

SecurePath by Transamerica has unveiled a special Second Careers section of its Web site designed to help pre-retirees and employers plan for the type of retirement that best suits them.
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The new section includes information such as recommended career and volunteer site links and exclusive editorial content. Pre-retirees can also use this portion of the site to take a Retirement Readiness Quiz which will indicate whether the quiz-taker is “not ready yet,” “not quite ready,” “reasonably ready,” or “ready!” for retirement.

Among the new content is a list of book summaries containing titles on key topics concerning ways to ease into the change that retirement brings and how to get the most out of the next phase of life. Also included is a video library and columns by featured authors.

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“The ‘what are you going to do in retirement?’ conversation has changed a great deal in the past 10 years,” said Will Prest, chief marketing officer of SecurePath by Transamerica, in a press release. “The opportunities for Boomers to engage in a second career or a phased retirement or to donate time to a favorite cause are becoming more and more prevalent, and Boomers are finding ever-more eclectic ways to find fulfillment in the ‘third age.'”

The SecurePath Web site is at http://www.securepathbytransamerica.com/app/.

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