The Average IRA Account Balance
IRA accounts provide a tax shelter for your retirement savings. In addition, the IRA allows a wide range of investment choices. The average IRA account balance depends entirely on the investment choices you have available and your ability and skill when it comes to investing.
Other People Are Reading
-
Size
-
According to the Employee Benefit Research Institute, the average IRA balance in America was $54,863 in 2008, with average balances for all accounts from the same owner totaling $69,498.
Significance
-
The significance of these average balances is that the IRAs are averaging less than $100,000. In order for your average IRA account balance to be higher than the national average, you must either invest more money in your IRA or you must do a better job with your investments -- or both.
-
Options
-
IRA accounts may invest in a variety of investments including mutual funds, stocks, bonds, bank CDs, annuities, precious metals and real estate. IRAs can also invest in exotic investments like stock options. However, you should choose an investment that you understand. Investment performance may vary from year to year, unless you choose a fixed interest investment option.
Warning
-
Your average IRA balance may be lower than the average account balance if you make withdrawals during your lifetime and incur penalties for early withdrawals. Your average IRA account balance may also be affected by how much you contribute to your IRA. If you choose to contribute less than the average contribution ($3,798 for traditional IRAs and $3,580 for Roth IRAs), then your average account balance may be lower depending on how your investments perform.
Considerations
-
When investing in an IRA, consider investing more than the average contribution. Also, consider sticking to investments that you are familiar with. Minimize penalties and miscellaneous fees in your account by choosing efficient investments (investments with low charges, commissions and other associated costs) and by avoiding making withdrawals from your IRA prior to age 59 1/2.
-
References
- Photo Credit Comstock/Comstock/Getty Images
