IRA Withdrawals, 2011

This paper examines the percentage of traditional or Roth IRAs in the EBRI IRA Database that had a withdrawal in 2011. In this study, only withdrawals from the accounts identified as traditional or Roth IRAs in the database are examined, a total of 15.3 million accounts with $1.11 trillion in assets. In addition, the amount and the proportion of the account this withdrawal represents is investigated by IRA type and account balance, as well as by the gender and age of the account owner. Furthermore, the fraction of traditional IRAs receiving a rollover and having a withdrawal is studied. Just over 16 percent of traditional and Roth IRA accounts had a withdrawal in 2011, including 20.5 percent of traditional accounts. This percentage was largely driven by activity among traditional IRAs owned by individuals ages 70-1/2 or older where the individuals were required to make withdrawals from their tax-qualified accounts. Looking at accounts that have both a withdrawal and a rollover, there appeared to be some movement of dollars consistent with a desire to take advantage of differing tax rules between IRAs and employment-based retirement plans; nearly a third (29.5 percent) of those having both a rollover and a withdrawal took a withdrawal at least equal to that of the rollover. While the median withdrawal rates suggest that many individuals are highly likely to maintain the IRA as a source of income throughout retirement, further study is needed to see if these individuals are keeping their withdrawal rates at these levels as they get older. Additionally, once 2012 data is processed for the EBRI IRA Database, the withdrawal behavior over time (longitudinally) for a three-year period will be examined. Furthermore, the integration of IRA data with data from employment-based defined contribution retirement accounts that is currently underway will allow for a better picture of what individuals who own all these accounts do as they age through retirement.The PDF for the above title, published in the February 2014 issue of EBRI Notes, also contains the fulltext of another February 2014 EBRI Notes article abstracted on SSRN: “Employer and Worker Contributions to Health Reimbursement Arrangements and Health Savings Accounts, 2006-2013.”