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Individual Retirement Accounts - Who Is Using Iras?

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Results from the 1998 Survey of Consumer Finances (SCF) show that almost 49 percent of U.S. households have some type of retirement account, an increase of more than three percentage points over 1995 (Kennickell et al.). The SCF provides more specific data regarding ownership of IRAs (Kennickell). Additional statistics were computed using data from the 1998 SCF to determine the percentage of individuals between nineteen and ninety-five years of age using IRAs during 1997. Over 28 percent owned an IRA in 1997, and the average balance was $20,209. The proportion of those owning IRAs increases with age, then decreases for those approaching retirement. The amount invested also increases with age, then begins to decrease, which is consistent with the fact that when a person retires, he or she is receiving distributions.

The overall strategy when deciding on an IRA is determining the best time to pay taxes, which is when the marginal tax rate is lowest. Further information can be obtained from Publication 590 of the U.S. Department of the Treasury.



HANNA, S., and CHEN, P. "Subjective and Objective Risk Tolerance: Implications for Optimal Portfolios." Financial Counseling and Planning 8, no. 2 (1997): 17–26.

HOFFMAN, W. H.; SMITH, J. E.; and WILLIS, E., eds. Individual Income Taxes: 2001 Edition. Cincinnati: South-Western College Publishing, 2001.

KENNICKELL, A. B. Codebook for 1998 Survey of Consumer Finances. Washington, D.C.: Federal Reserve System, 1997.

KENNICKELL, A. B.; STARR-MCCLUER, M.; and SURETTE, B. "Recent Changes in U.S. Family Finances: Results from the 1998 Survey of Consumer Finances." Federal Reserve Bulletin 86, no. 1 (2000): 1–29.

PRESTON, R. "The Dos and Don'ts of IRA Investing." Journal of Accountancy 189, no. 4 (April 2000): 45–53.

U.S. Department of the Treasury. "Individual Retirement Arrangements." Publication 590, 1999. http://www.irs.ustreas.gov/

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