Data & Research February 27, 2019

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

Among those who make ongoing contributions, 53% were approached by a financial services company or professional to set it up.

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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.

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Data & Research February 27, 2019

Many Americans Prioritize Emergency Fund Savings Over Retirement Savings

Individuals polled by First National Bank of Omaha also shared reasons they do not have as much savings as they'd like.

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Asked what their No. 1 savings goal is, 40% of Americans say it is an emergency fund, and only 26% say it is retirement, according to the 2019 Savings Survey conducted by First National Bank of Omaha. The bank released its findings in recognition of America Saves Week.

The survey also found that 74% of Americans put 10% or less of their monthly paycheck toward savings, and 23% save nothing. Sixty percent think they are somewhat are very likely to be on track with their savings to retire at age 65. Forty-nine percent save they only have enough liquid funds to cover living expenses for 0-3 months.

Asked why they do not have as much savings as they would like, 26% say it is the high cost of living, 13% say it is credit card debt, and 13% say it is educational debt.

Sixty-three percent do not set annual savings goals, and 53% say they are living paycheck to paycheck. Twenty-five percent say they have never had to withdraw from their savings account, while 24% do so once a month, and 21%, once a year.

“With debt and living expenses on the rise in much of the country, the importance of setting financial goals—and sticking to them—has never been greater,” says Jerry O’Flanagan, executive vice president, consumer banking, at First National Bank of Omaha. “The hardest part of saving? Getting started. However, once a savings plan is in place, they key is to regularly reevaluate and readjust your savings efforts for maximum impact.”

First National Bank of Omaha’s findings are based on an online survey of 1,000 adults.

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