Traditional IRA investors showed little reaction to the economic downturn in 2007.

The Investment Company Institute analyzed the contribution, rollover, withdrawal and asset allocation activity of 5.2 million traditional IRA investors from 2007 through 2013 to determine how they weathered the financial crisis.

Contribution and rollover activity declined a bit in the wake of the financial crisis and withdrawal rates rose slightly between 2008 and 2013 but only a small group of younger traditional IRA investors took money out of their traditional IRAs during this time, according to The IRA Investor Profile: Traditional IRA Investors’ Activity, 2007-2013.

“Traditional IRA investors’ allocation to equity holdings fell, on average, although some of the change merely reflects market movement rather than investors’ rebalancing,” the report found.

Also see: Look to state legislators to spur IRA growth

As an example, the ICI said that among consistent traditional IRA investors between the ages of 25 and 29, about three-quarters of their traditional IRA assets were invested in equity holdings at the end of 2007. At the end of 2012, two-thirds of their assets were invested in equity holdings. At the end of 2013, 72.6% of assets were invested in equities.

As far as account balances are concerned, the ICI pointed out that while they fell dramatically following the stock market crash, account balances were significantly higher at year-end 2013 than they were at year-end 2007.

“Traditional IRA investors in all age groups except for those 75 or older saw their account balances increase on average between 2007 and 2013,” the report stated.

Because people are no longer able to contribute to their IRAs after they turn 70 ½, older investors saw their account balances decline through 2013.

“Increased Roth conversion activity in 2010 also may have put downward pressure on average traditional IRA balances,” the ICI said.

In 2013, 8.7% of traditional IRA investors contributed to their traditional IRAs, and nearly half of traditional IRA investors who did so contributed at the legal limit, the report said.

About two-thirds of new traditional IRAs were opened through rollovers from workplace accounts in 2013.

“Because rollovers generally occur after job change or retirement, which is a sporadic event for most people, in any given year only about one in 10 traditional IRA investors made rollovers,” the ICI said.

Also see: 5 reasons 401(k) IRA rollovers area  bad idea

Withdrawal activity is concentrated among the older traditional IRA investors. It is rare for younger investors to take withdrawals with only about one in five traditional IRA investors taking withdrawals in 2013. Of these, about three-quarters were by those 60 and older and more than half were taken by those investors over the age of 70 who are required to take distributions.

Withdrawal activity “predictably dipped in 2009 when required minimum distributions were suspended by law,” the report said.

Paula Aven Gladych is a freelance writer in Denver.

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