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.