Study: As Tax Time Looms, Record Low 9% of Americans Will Make Full IRA Contribution

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A new study highlights US workers declining participation in Individual Retirement Accounts.

Americans say that saving for retirement is their number one financial priority, but their words do little to match their actions according to a new study released today by Greene IRA.

The report shows that the percentage of US workers who make annual IRA contributions has dropped only 15%, a record low since IRAs became popular in the late 70’s and early 80s.

In most cases, the IRS allows a deduction of $5000-6000 dollars into an IRA. In 2010, only around 9% of workers actually made that level of contributions as allowed by law.

Additionally, the total percentage of working US adults who maintains any type of IRA has dropped to only 38%. This marks the fourth straight decline since the beginning of the current economic crisis. In contrast, nearly 42% of Americans owned an IRA in 2008.

The story these numbers tell is that not only are workers opening less retirement accounts, but even the ones that do are making fewer contributions. The study reports that almost 24% of adult Americans own an IRA, but won’t make any deposits to it for the 2011 tax year.

This news comes despite 2012 changes made by the IRS to increase maximum IRA income limits. The new rules allow US citizens to claim tax advantages for both traditional and Roth IRAs. In most cases, the IRS raised income limits by $2000 for 2012.

IRAs, once heralded as must-have safe haven for middle class Americans, peaked in popularity in the mid 2000s. Although IRAs offer considerable tax benefits over other types of investments, fewer Americans have turned to them as an investment choice in the past few years.

The study also shows an increasing gap between what Americans have saved through retirement accounts and what they actually need for retirement. This shortfall is forcing older Americans to extent their working years. 26% of workers said they have postponed their planned retirement age in the past year, up from 18% in 2010.

The news isn’t all bad. US workers who did own IRAs and made a contribution in the past year had average IRA assets of over $148,000.

The full study is available at http://iracontributionlimits2010.com/as-tax-time-nears-a-dire-trend-with-retirement-savings/2012/03/

About Greene IRA
Green IRA has a long legacy of helping unique individuals and savvy investors and their families by providing unique 401k investment options as well as smart IRA strategies.

More Info: http://iracontributionlimits2010.com/

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Allyssa Holden
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