Government Study Shines Light on IRAs: Popular and Ripe For The Picking

By Jeffery Levine, IRA Technical Expert  

Follow Me on Twitter:

Yesterday the United States Government Accountability Office (GAO) released a study on IRA balances accumulated as of 2011. The report provides some fascinating information about the number of people who have IRAs, as well as the staggering amounts that some people have accumulated in them. While there are many points that can be taken away from the study, here are three that may be of particular interest.

1) The Government Realizes That IRAs Are Ripe For The Picking.  When discussing why the GAO did this study, here’s what they had to say: “In 2014, the federal government will forgo an estimated $17.5 billion in tax revenue from IRAs. Congress limited annual contributions to IRAs to prevent the tax-favored accumulation of unduly large balances, but concerns have been raised that tax benefits accrue primarily for higher-income individuals.”


“Holy crap! We’re broke and look at all the tax revenue we’re losing because of retirement accounts! How the heck did all that tax-favored money get in there and how can we get our hands on it?” Make no mistake about it, Uncle Sam recognizes that IRAs and other accounts are big, juicy steaks, just waiting to be taxed. Given our country’s fiscal problems, it wouldn’t be a great leap to envision significant changes in the future aimed at curbing the benefits of these accounts.

2) There Are A Lot Of People With IRAs. The GAO report estimates that, as of 2011, there were almost 43 million different taxpayers that owned IRAs. That number has almost certainly grown since then and doesn’t even begin to tell the full story. The report only counted taxpayers with IRAs and not those with other tax-favored retirement plans, such as 401(k)s and 403(b)s. While there is generally no requirement to move funds out of these plans (other than required minimum distributions (RMDs)) during one’s lifetime, for a variety of reasons, many retirees choose to roll these funds over to IRAs after they’ve left their job – meaning that as the Baby Boomers continue to retire in record numbers, a similar affect on IRA growth can reasonably be expected.

3) Mitt Romney’s IRA Has Company! Back in 2012, while running for the office of the President of the United States, Mitt Romney’s IRA got a lot of attention. Although Romney, himself, never confirmed how much his IRA was worth, wide-spread reports put the total at between $25 million and $100 million. That’s quite the range and there’s obviously a big difference between $25 million and $100 million, but suffice to say, Mitt Romney has a lot more money in his IRA than most people, but…

He’s not alone. According to the GAO’s report, back in 2011, there were an estimated 314 taxpayers with IRAs of more than $25 million. There were another 791 taxpayers with IRAs between $10 million and $25 million and, altogether, close to 600,000 people with at least a $1 million dollars in their IRA. That translates to about 1.4% of the total IRA owning population – a relatively small percentage, but one that’s higher than many people might otherwise have expected.

For more on the GAO study, you can click here to download the full report.


Receive Ed Slott and Company Articles Straight to Your Inbox!
Enter your email address:

Delivered by FeedBurner


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.