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Cerulli: IRAs 33% of Total Retirement Market by 2016

(AP Photo/Jeffrey Phelps)
(AP Photo/Jeffrey Phelps)

Individual Retirement Accounts (IRAs) will compose 33% of the total retirement market in the U.S. by 2016 according to a new report by Cerulli Associates, Boston, Mass.

Total asset levels have grown 9.6% from 2009 to 2010. The total amount at year’s end 2010 was $15.8 trillion. Cerulli anticipates that retirement markets will grow slightly, in tandem with the continued recovery, at around 1% to reach $16 trillion in 2011. If the economic recovery continues at its current pace, retirement asset levels will hit $22 trillion by 2016. Total IRA assets account for 29.7% of total retirement market assets currently but as Defined Contribution (DC) plans rollover, IRA’s will encompass the aforementioned 33% by 2016.

“The decisions Baby Boomers make regarding DC plan balances as they enter retirement continue to greatly impact DC and IRA balances. While much of the industry has discusses in-plan retirement income solutions, few of these solutions have been implemented by DC plans. Since there has been little to entice Baby Boomers to stay in-plan, they continue to roll large balances into IRA’s,” said Alessandra Hobler, an analyst in Cerulli’s retirement practice.”

Research done by Cerulli indicates that without action to cease distributions, rollovers will continue to spur IRA assets expanding their market share of the total market after 2016.

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