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).

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.

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