IRAs have existed for 45 years – middle-aged in human terms. But that doesn’t translate to understanding, according to recent research that says Americans’ confidence in their knowledge of IRAs is low.
In fact, just over a third of those studied by the LIMRA Secure Retirement Institute said they are confident in their knowledge of IRAs. That takes on added significance, LIMRA says, since in a nation of more than 300 million people, 41% have either a traditional or a Roth IRA, and 9% have both.
The lack of knowledge about IRAs, LIMRA says, is “the biggest obstacle preventing Americans to invest” in them. Other findings lend further credence to that conclusion: LIMRA says that almost half of those who do not have IRAs said they don’t understand IRAs sufficiently to contribute to one. And that takes on added significance in light of statistics from the Investment Company Institute (ICI) that LIMRA cites in which ICI reports that even among those who have IRAs, just over one-third make regular or ongoing contributions to them.
LIMRA argues that one remedy is for there to be interaction with a financial services company or advisor. According to LIMRA, ICI says that just over half of those who make regular contributions to
IRAs had been approached by a financial professional or services company to set them up.
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