TIAA-CREF Survey Reveals Majority of Americans Miss
Opportunity to Contribute to IRAs for Retirement Savings
Women and baby boomers are more likely to contribute up
to the maximum, while younger Americans unaware of the benefits of IRAs
New York, NY, March 26, 2012 – Only 22 percent of Americans
say they are saving for retirement by contributing to an Individual Retirement
Account (IRA), according to a survey released today by TIAA-CREF, a leading
financial services provider.
An IRA can provide a tax-advantaged way to save for retirement. For the 2011
and 2012 tax years, investors can contribute up to $5,000 — or up to $6,000 for
those age 50 or older — to a traditional IRA and/or a Roth IRA.
Yet the research – which polled 1,007 adults age 18 years and older
nationwide – found that only about four in 10 (38 percent) Americans who own an
IRA are contributing up to the annual limit, and 55 percent are investing less
than the maximum allowed amount each year – missing out on the opportunity to
maximize their tax and savings benefits. Seventy-six percent of those polled say
they are not currently contributing to an IRA.
The survey also revealed that 62 percent of investors were unaware of two
noteworthy IRA features: catch-up contributions that allow investors age 50 and
older to contribute more than the annual maximum, and Roth IRA withdrawal
guidelines that allow contributors to withdraw money without paying taxes or
penalties.
Other notable survey findings include:
- Women and baby boomers most likely to contribute to the
maximum
Among those currently contributing to an IRA, the survey
found that women (41 percent) are more likely than men (34 percent) to
contribute up to the annual maximum for an IRA. At 52 percent, baby boomers of
both genders are most likely to fully fund their IRA each year, and 45 percent
of college graduates of all ages report they invest the maximum allowed amount
annually.
- Younger Americans unaware of the benefits of an IRA
Younger Americans (ages 18-34) who responded to the survey knew the least
about the benefits of using an IRA as a retirement investment tool. Nearly
three-fourths (73 percent) of those age 18-34 were unaware of the maximum
amount of money you can contribute to an IRA annually – which was 12
percentage points higher than the average of all adults who participated in
the survey. Fifty-eight percent of those in this age range did not know that
IRA contributions grow on a tax-deferred basis.
- Income levels also play a significant role in saving for
retirement
Just 8 percent of Americans earning less than $35,000 a
year contribute to an IRA, and 13 percent of Americans earning $35,000 to
$50,000 annually contribute to an IRA.
Survey Methodology
The 2012 TIAA-CREF IRA survey polled
1,007 adults age 18 years and older between February 2 and 5, 2012. The
nationally representative telephone survey was conducted by a third-party
research firm. The margin of error for the entire sample is plus or minus 3.1
percentage points at the 95 percent confidence level.
About TIAA-CREF
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization
with $464 billion in assets under management (as of 12/31/11) and is the leading
provider of retirement services in the academic, research, medical and cultural
fields.
Media contacts
Jeannine DeFoe, TIAA-CREF
jdefoe@tiaa-cref.org
212 913-3501
Chad Peterson, TIAA-CREF
cpeterson@tiaa-cref.org
704
988-6811