More U.S. households are using Roth Individual Retirement Accounts (IRAs) as an investment vehicle than a year ago, according to a report released by Investment Company Institute.
The Washington-based trade associations annual report on IRA ownership revealed that Roth IRA ownership among American households rose 21% to 16 million as of June. In addition, the number of households that held traditional IRAs climbed to an estimated 36.4 million, up from 35.7 million in the year-ago period.
ICI reported that more than 41% of U.S. households now own IRAs. That number increased to 45.2 million households from 43.2 million a year earlier. Nearly two-thirds of IRA households included mutual funds in their portfolios, with equity funds making up a bulk of them. ICI also said that 38% of IRA households held individual stocks in their IRAs.
IRAs have been one of the fastest-growing components of the retirement market over the last decade, with total assets eclipsing $2.3 trillion at the end of 2002, representing a 23% market share of the $10.2 trillion U.S. retirement market. New net cash flow from IRAs to mutual funds was an estimated $50 billion in 2002.