IRA Asset Allocation, 2010

24 Pages Posted: 26 Oct 2012

See all articles by Craig Copeland

Craig Copeland

Employee Benefit Research Institute (EBRI)

Date Written: October 1, 2012

Abstract

This paper is the second examination of asset allocation from the EBRI IRA Database. The EBRI IRA Database is an ongoing project of the Employee Benefit Research Institute that currently contains information on 14.85 million accounts of 11.1 million unique individuals with total assets of $1.002 trillion, as of year-end 2010. It studies asset allocation on a dollar-weighted basis within IRA accounts by IRA type and account balance as well as by gender and account-owner age. In addition to presenting the average asset allocation across the accounts, this study includes a presentation of the percentage of accounts with “extreme” allocations -- either less than 10 percent or more than 90 percent in a particular asset category. This helps illustrate the distribution of the allocations across the accounts. Analysis of the EBRI IRA Database finds that about half of all individual retirement account (IRA) assets are allocated to equities, although this varied with age, account balance, and IRA type. Those older, having higher account balances, or owning a traditional-rollover IRA had, on average, lower allocations to equities. Roth IRA owners were much more likely to have 90 percent or more of their account invested in equities than owners of the other types. Above age 35, the likelihood that an IRA owner has more than 90 percent in equities decreases. IRA owners with higher account balances were less likely to have extreme asset allocations. This research on IRA asset allocation will be built upon in future studies by examining how IRA owners with a 401(k) plan allocate their assets across those accounts, leveraging the unique ability of EBRI’s databases to link individuals’ IRAs and 401(k) accounts.

The PDF for the above title, published in the October 2012 issue of EBRI Notes, also contains the fulltext of another October 2012 EBRI Notes article abstracted on SSRN: “Savings Needed for Health Expenses for People Eligible for Medicare: Some Rare Good News.”

Keywords: Asset allocation, Individual retirement accounts (IRAs), Individual retirement account rollovers, Pension plan assets, Roth IRA, Savings Incentive Match Plans for Employees (SIMPLE), Simplified Employee Pension (SEP)

JEL Classification: D31, G11, G23, J10, J16

Suggested Citation

Copeland, Craig, IRA Asset Allocation, 2010 (October 1, 2012). EBRI Notes, Vol. 33, No. 10, October 2012, Available at SSRN: https://ssrn.com/abstract=2167020

Craig Copeland (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States
202-775-6356 (Phone)
202-775-6312 (Fax)

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