How Americans Use IRAs

The study also found that households with traditional IRAs rarely withdrew from their accounts, with most withdrawals retirement related. Just 26% of households owning traditional IRAs in 2018 took withdrawals in tax year 2017, which is consistent with previous years.

In addition, 85% of households making withdrawals were retired, and only 5% of traditional IRA-owning households headed by workers below the age of 59 took withdrawals in tax year 2017.

The study also found that a third of U.S. households had IRAs in 2018, and more than 80% of them also had funds in employer-sponsored retirement plans. More than a quarter of U.S. households had traditional IRAs — the most common type; that was followed by Roth IRAs (about 18%) and employer-sponsored IRAs (6%).

Households with IRAs spanned a wide range of incomes, with the majority earning less than $100,000; 12% had household incomes less than $35,000 and 40% had household incomes between $35,000 and $99,999.

Also, most traditional IRA-owning households have a retirement strategy, typically with a number of moving parts such as reviewing asset allocations, determining retirement expenses, developing a retirement income plan, setting aside emergency funds and figuring out when to take Social Security benefits.

— Check out 401(k)s Are Failing; Here's What We Need Instead, Professor Says on ThinkAdvisor.