Approximately two-thirds of all affluent investors have an employer sponsored defined contribution plan like a 401(k), according to a Spectrem Group study.
The research examined financial product ownership among three different wealth segments: Mass Affluent (with a net worth between $100,000 and $1 million Not Including Primary Residence), Millionaire (with a net worth between $1 million and $5 million NIPR), and Ultra High Net Worth (with a net worth between $5 million and $25 million NIPR).
Forty-four percent of Mass Affluent, 57 percent of Millionaires and 67 percent of UHNW investors had Rollover IRAs. For the UHNW investors, that was an increase of 5 percent over 2012. The younger investor was less likely to have a rollover IRA, with only 44 percent of investors aged 44 and younger owning one.
The ownership range for contributory IRAS was 41 percent (Mass Affluent) to 61 percent (UHNW). For Roth IRAS, the range was 38 to 49 percent, and UHNW investors increased their participation from 33 percent in2012 to 49 percent
Both the Mass Affluent and Millionaire studies showed 66 percent of investors owned employer sponsored defined contribution plans. Among UHNW investors, it was only 60 percent ownership, but that was a significant increase from 2012, when only 48 percent of UHNW investors had such plans.
The study further segmented the investors into their level of advisor dependency, and those investors who were heavily dependent upon advisors for financial decisions were less likely to have retirement accounts. For instance, among Mass Affluent investors, only 52 percent of investors who were advisor-dependent had 401(k) plans compared to the total of 66 percent.
The same was true for contributory IRAs with 41 percent of all Mass Affluent investors having such an account but only 28 percent of advisor dependent investors doing so.
Age was also a factor. Among investors 54 years of age and younger, employer sponsored DC accounts were extremely popular, with 93 percent of Millionaires owning them. The same was true among UHNW investors, with 92 percent of investors aged between 44 and 54 having DC accounts.
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