Most of those surveyed (80%) said they are not contributing to an IRA, up 4% from last year. Close to half also lack basic understanding of what IRAs are and how they are used, a finding that clearly points to these individuals missing out on savings and tax benefits. This low awareness underscores the importance of financial education and advice, the study said.

In addition to education and awareness programs, the results highlight the need for personalized advice to help individuals make the best financial decisions at all life stages. For example, the findings show individuals are missing out on opportunities to use an IRA to help save for other financial goals. Among those who currently have an IRA, only 11% of respondents said they plan to use it to help pay for higher education, and only 5% plan to use one to help with a down payment on a new home.

Gen X respondents (age 35 to 44), in particular, demonstrated a clear need for advice and education, with 67% saying they would consider opening an IRA. However, of those who are disregarding IRAs, nearly half said the reason is they don’t know enough about them.

An IRA can provide a tax-advantaged way to save for retirement. For the 2013 tax year, investors can contribute up to $5,500—or up to $6,500 for those 50 or older—to a traditional IRA or a Roth IRA. The survey found that almost two-thirds of respondents are unaware of the maximum contribution amounts. More than half of those surveyed who own an IRA reported they are investing less than the annual limit and, as a result, are missing an opportunity to maximize potential tax and savings benefits.

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“Many individuals are still missing out on the long-term savings benefits of IRAs, simply because they don’t understand what they are and how they work,” says Dan Keady, director of financial planning for TIAA-CREF. “By allowing savings to grow on a tax-deferred basis, an IRA can help give current retirement savings a boost no matter what stage of life you’re in.”

Despite low participation and awareness of how IRAs work, the study shows people are open to the account’s potential benefits, with 57% of survey respondents who did not have an IRA saying they would consider one. This includes almost three-quarters of Gen X respondents, two-thirds of Gen Y (18 to 34) and half of late Baby Boomer (45 to 54) respondents who do not have an IRA.

“We are all responsible for our own financial future, so the fact that individuals see the value in having an IRA – even if they don’t have one yet – is encouraging,” Keady added. “Through financial education and increased awareness, people can take the next step toward reaching long-term financial goals.”

The survey also found differences based on gender. Men are more likely to contribute to an IRA than women, and men who have an IRA are also more likely to contribute up to the maximum amount.

“When it comes to making decisions such as how to maximize your tax benefit through an IRA, individuals need to find the right adviser to help them navigate through vast amounts of information. What works for one person won’t necessarily work for another,” Keady said.

The 2013 TIAA-CREF IRA survey polled 1,008 adults age 18 years and older by phone between February 21 and February 24 on their attitudes, preferences and behaviors regarding IRAs. The nationally representative telephone survey was conducted by KRC Research, an independent research firm.