Individual Account Retirement Plans: An Analysis of the 2013 Survey of Consumer Finances

28 Pages Posted: 24 Nov 2014

See all articles by Craig Copeland

Craig Copeland

Employee Benefit Research Institute (EBRI)

Date Written: November 2014

Abstract

This paper assesses the status of American families’ accumulations in individual account (IA) retirement plans, both through the incidence of ownership and the amounts accumulated, using the Federal Reserve Board’s triennial Survey of Consumer Finances (SCF). Building on previous research by the Employee Benefit Research Institute (EBRI) using prior SCF surveys, this paper investigates the percentage of families who own various types of retirement plans, including IRAs. Next, it provides both median and average estimates of the value of the assets in these accounts, as well as the proportion of total financial assets represented and their relative percentages within the IA retirement plan universe. It then focuses on the value of IRA rollovers as part of the total IRA market, in order to glean a sense of the full contribution that the employment-based, retirement-plan system makes to total retirement assets. The percentage of all families with an employment-based retirement plan from a current employer decreased from 38.8 percent in 1992 to 36.2 percent in 2013. While retirement plan ownership from a current employer among families declined from 2010-2013, the percentage of family heads who were eligible for defined contribution (DC) plans and chose to participate held essentially stable at 78.2 percent in 2010 to 78.7 percent in 2013. The percentage of families owning individual retirement accounts (IRAs) or Keoghs was also unchanged from 2010 (28.0 percent) to 2013 (28.1 percent). Furthermore, the percentage of families with an individual account retirement plan from a current employer or a previous employer or an IRA/Keogh declined from 50.4 percent in 2010 to 48.2 percent in 2013. However, when including defined benefit (pension) retirement plans, the percentage with any retirement plan was unchanged from 63.8 percent in 2010 to 63.5 percent in 2013. While ownership of employment-based plans and IRAs was unchanged to declining in 2013, the median (mid-point) account balance of those families owning an individual account retirement plan increased in 2013: The value was $22,992 in 1992, reached $38,608 in 2001, and increased to $59,000 in 2013. Individual account retirement plan assets were a clear majority of families’ total financial assets (among those owning such plans): 70.3 percent in 2013 at the median, unchanged from 2010. Across all demographic groups in 2013, these assets’ share at the median of total financial assets was at least 49.2 percent (when these accounts were owned). By IRA type, regular IRAs accounted for the largest percentage of IRA ownership, but rollover IRAs had a slightly larger share of assets than regular IRAs in 2013.

Keywords: Defined benefit plans, Defined contribution plans, Employment-based benefits, Individual retirement accounts (IRAs), Keogh plans, Pension plan assets, Pension plan coverage, Pension plan participation, Retirement plans, Wealth

JEL Classification: D12, D31, J1, J26, J33

Suggested Citation

Copeland, Craig, Individual Account Retirement Plans: An Analysis of the 2013 Survey of Consumer Finances (November 2014). EBRI Issue Brief, Number 406 (November 2014), Available at SSRN: https://ssrn.com/abstract=2530157

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)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
67
Abstract Views
684
Rank
608,061
PlumX Metrics