IRA Contributions Rise Almost 15%

According to a Fidelity analysis, contributions to their IRAs grew nearly 15% between 2007 and 2011.  The average contribution was $3930 in 2011, compared to $3420 five years ago.  There were double digit increases across all age groups.  Moreover, Roth IRA conversions continue to be twice that of 2009 – before income limits were removed.

“The historic market conditions over the last several years have jump-started many investors to take control of their personal economy and increasingly focus on saving for their retirement,” said Ken Hevert, vice president, Fidelity Investments. “These strong contribution rate increases also show more investors are leveraging the power of tax-advantaged vehicles like IRAs to achieve their retirement goals.”

Other findings from their analysis:  Roth IRA contributions passed Traditional IRA ones by 62.7%.  Investors in their 60’s contributed the most.  For those in their 50’s, Traditional IRAs were the trend because of income limits in Roth plans.  Over 80% of young people’s contributions were made into Roths.  The same is true for those over 70.

To read more on this story, check out marketwatch.com.  To set up your own Roth or Self-Directed IRA, contact a tax expert at the IRA Financial Group today.

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