By Marlene Satter
Average contributions to individual retirement accounts at Fidelity reached an all-time high of more than $4,000, according to the company’s second annual analysis of more than 7 million IRAs.
For tax year 2013, the average contribution was $4,150 – a 5.7 percent increase from tax year 2012 and the highest it’s ever been. Average balances gained almost 10 percent year over year for the same period, to total $89,100.
“The fact that IRA contributions are up across all age groups is a positive indication that many people are indeed committed to saving for retirement by putting at least a portion of what they earn into tax-advantaged vehicles such as an IRA,” said Ken Hevert, vice president, Fidelity Investments, in a statement,
The analysis indicates that older investors, those 50 years old and older, have held their spot as top savers in traditional and Roth IRAs. Investors in other age groups boosted their contributions as well; those in their 20s increased average contributions by 3.9 percent, those in their 30s by 6.7 percent and those in their 40s by 6.2 percent from tax year 2012 to tax year 2013.
No matter their age, investors are favoring Roth IRAs over traditionals. Younger investors, more likely to qualify for direct contributions to a Roth, are seizing upon a Roth’s tax-free growth potential and withdrawals. Older people turn to Roths to continue to save after they’ve passed the age limit of 70½ and can no longer contribute to a traditional IRA.
One factor that might have made it easier for investors to save is a mobile app that allows them to make check deposits via smartphone and tablet. In fact, during tax year 2013, that accounted for a more than 1,000 percent increase in mobile check deposits. Investors using the app can make deposits in Roths and traditional IRAs by taking a picture of the checks they want to deposit.
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Originally published on BenefitsPro.com