The Number of Individual Account Retirement Plans Owned by American Families

Abstract:     
This paper first looks at ownership of individual account retirement plans by family heads, then examines ownership of these plans across families. In brief, the data show that the majority of families in the United States do not own an individual account retirement plan at all, but of those that do own at least one plan, most own only one. However, the minority of families that own more than one individual account plan tend to have a disproportionate amount of the assets in these plans, so looking only at these families' current-job DC plan would significantly underestimate their total retirement assets. In 2004, 38.2 percent of American families owned a current-job DC plan and an IRA (Figure 4). Of those with an IRA, on average the families own 2.00 IRAs in addition to the current-job DC plan. Among these current-job DC plan owners, 4.3 percent own a former-job DC plan and own an average of 1.21 such accounts. In conclusion, the vast majority of family heads and families own either one individual account retirement plan or have no account. Those families that do own more than one account tend to have family heads between the ages of 35-64 and with family income of $50,000 or more. Assets in these accounts are also concentrated in families with these characteristics.

The PDF for the above title, published in the June 2008 issue of EBRI Notes, also contains the fulltext of another June 2008 EBRI Notes article abstracted on SSRN: "Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers."

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

JEL Classifications: D91, J1, J33

Accepted Paper Series