According to Cerulli’s report titled “The State of The Rollover and Retirement Income Markets: Sizing, Segmentation, and Addressability 2011,” IRAs are becoming the destination for defined contribution (DC) assets.
The total of all IRA types (traditional and nontraditional) reached $4.7 trillion in 2010, representing a 10% growth from the prior year. Cerulli said the overwhelming contributor over the past five years to the increase in traditional IRAs is $1.5 trillion of inflows from rollover assets.
Cerulli noted that outflows in the form of distributions from IRAs are slightly under half the rollover total at $730 billion. With the oldest Baby Boomers turning 65 in 2010, this demographic is five years from making required minimum distributions from their traditional IRA accounts.
Cerulli projects that rollovers will grow steadily from an estimated $349 billion in 2011 to nearly $600 billion in 2016. Rollovers are the single largest non-cash opportunity for asset managers, Cerulli said.
The report is available for purchase by contacting CAmarketing@cerulli.com.