How Do You End Up With A Million Dollar IRA Account?

By John Rothe, CMT

John Rothe CMT is the Founder and Chief Investment Officer of Riverbend Investment Management

July 3, 2017


An IRA worth $1 million or more must be a product of very early retirement planning and very astute investing, right?

Compounding and great yields certainly count, but they aren’t the only reasons behind seven-figure IRAs.

According to a recent report from the federal Government Accountability Office (GAO), about 1% of IRA owners have $1 million or more in their accounts.

In this recent snapshot, the GAO estimated that there were 7,952 Americans whose IRAs held $5-10 million and 314 IRA owners whose accounts contained more than $25 million!

Where is all this money coming from or being generated???

Often, the major factor in creating a seven-figure IRA balance isn’t the IRA’s earnings…

Instead, it is a lump sum rolled over into the IRA from a workplace retirement plan. If an employee has contributed to a 401(k) or 403(b) for decades (perhaps with employer matches along the way), the result can be a six-figure asset balance. (The larger annual contribution limits for workplace retirement plans also help to promote large account balances over time.)

An emphasis on equity investing plays a part – the GAO observed that IRA owners who were less risk-averse tended to amass greater IRA balances than more conservative investors.

Lastly, IRA structure is undeniably a factor: the account rules permit the invested assets to grow and compound with taxes deferred.



This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.



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John Rothe CMT

Riverbend Investment Management is a Registered Investment Advisor (RIA), established in 2006 with the primary goal to provide actively managed investment strategies to both individual and institutional clients.

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