70% of IRA assets are owned by those at least 60 years old

Individual retirement account (IRA) assets surpassed $9 trillion in 2017, and those who are 60 and older account for 70% of those assets, according to research and consulting firm Cerulli Associates.

“A significant driver of IRA asset growth is rollover activity from defined contribution (DC) plans, especially for the age 60 and older cohort,” Cerulli analyst Dan Cook said. “As investors approach retirement and transition into this life stage, their financial focus shifts from accumulating assets to drawing down assets to generate retirement income. This draw-down phase is far more complex than the accumulation phase as retirees often rely on a mosaic of sources, such as IRA savings, 401(k) savings and Social Security for retirement income.”

How investors draw down their assets can affect taxes, the length at which income is available and retirement lifestyle, said Cook, adding that investors often require help from a financial professional for retirement planning. But he said some financial advisers aren’t well versed on topics such as Social Security or healthcare costs.

“Asset managers and IRA providers can create value by providing thought leadership content and/or planning tools that help financial advisers meet the needs of investors age 60 and older,” Cook said. “Given the substantial amount of IRA assets held by investors near retirement or in retirement, income planning will become an increasingly important topic going forward.”

Boston-based Cerulli recently surveyed more than 1,000 IRA owners, including active employees and retirees, and released results of the survey in a report, U.S. Retirement End-Investor 2018: IRA Owners and 401(k) Plan Participants. The report includes how IRA owners prepared for retirement, a breakout of assets and account ownership by age range and analysis of opportunities in the IRA rollover market.