The average balance of seven million IRAs custodied at Fidelity Investments reached a five-year high of $81,100 at the end of tax year 2012, according to the Boston-based fund giant. The figure was 53% higher than the five-year low, registered in 2008
Total contributions to Fidelity IRAs have increased 7.5% from tax year 2008 to 2012, with the average IRA contribution reaching $3,920 in tax year 2012. Roth IRA conversion activity also jumped at the end of 2012 as tax law changes were debated, contributing to a 12% year-over-year increase.
The findings from Fidelity, the largest IRA custodian, highlight positive balance trends across all age groups despite even contribution levels (at right):
Total contributions to IRAs have increased every year since 2008, with a 3.1% increase over last year and a 7.5% increase over 2008. At the same time, the average contribution held strong at $3,920 for tax year 2012 (vs. $3,930 for tax year 2011).
Investors in their 60s continue to save the most in their traditional and Roth IRAs. For tax year 2012, these investors contributed on average $4,910 to Traditional IRAs and $4,840 to Roth IRAs. Full contribution rates with age breaks are as follows (below):
As tax law changes were debated, Roth IRA conversions conducted by investors increased in 2012. In fact, there was a 12% year-over-year increase in Roth IRA conversions, and a 52% year-over-year surge for the month of December. Overall, Fidelity conducted more than 101,000 Roth IRA conversions with investors in 2012.
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