IRA Survey Shows People Spend More Time Choosing a Restaurant Than Planning IRAs
The latest TIAA-CREF survey finds that fewer than 1 in 5 Americas are contributing to an IRA, potentially missing tax and savings benefits. The survey, conducted by an independent research firm between February 13-16, 2014, showed that just 17% of respondents contributed or were contributing to an IRA in 2014 - down from 19% last year and 22% in 2012.
Spread out over age ranges, 30% of Americans ages 45-54 are most likely to contribute to an IRA, compared to just 20% of those age 35-44 and 11 percent of Gen Y (ages 18-34). More than anything, the survey showed that many Americans lack a fundamental understanding of how an IRA works, which should be a boom for a competent, educated financial advisor.
When asked if they have spent 2 or more hours planning for IRAs in the past year, just 15% of respondents said they had, compared to 21% who said they spent that much time figuring out what new television to purchase.
However, in a positive, a majority of survey respondents who contribute to an IRA also are putting money aside in an employer retirement plan, such as a 401(k) or 403(b). Sixty percent of those who are contributing to an IRA also are putting money away in an employer-sponsored plan. Among respondents with both plans, 53% say they contribute to their IRA regardless if they've reached their employer-based plan's employer match limit or employee contribution limit - which isn't the best news. Why? They could be leaving money on the table.
Here's the link to the full survey release:
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