With all of the talk of the housing market making somewhat of a comeback (in some areas at least) and how that may positively impact the average person, the plain old IRA may be just as significant. Fidelity recently reported some surprising news regarding IRAs.
Average balances on IRA saving accounts Fidelity administers reached over $81,000 at the end of 2012, a 53 percent increase from the end of 2008. Fidelity is one of the top providers of IRAs to investors.
The news was even better for older folks. Those in the 60-to-69 age bracket saw their balances rise 70 percent, to $127,800 from $75,000. It was up 81 percent for those ages 50 to 59, to $75,700 from $41,900
Wow. That seems surprising doesn’t it? While the market has undoubtedly been the driving force, it is more the individual holders of the IRAs that deserve some credit. It shows that many people did not panic out of the stock market (or at least did not panic for long) and they stuck it out to finally see some reward five years later.
That is a nice piece of news, but now what? Well, the advice is almost always the same for all investments and that is make sure that you have the proper balance. Of course, with IRAs there is the question of contributions and withdrawals as well as tax consequences. Those are unquestionably important topics. We’ve covered them here at PrimeRates, and will do so again, but those are also side discussions from the big picture. What is of paramount importance is how do your investments all fit together. Assuming, you have an investment plan in place (if not–make one!) and that you still believe in it, now might be a good time to do a review. With the market near highs there is a chance that you are now over weighted in equities.
And let’s not forget 2008 or 2000 or 1987 and pretend it could not happen again. Did you feel that you had way too much money in the stock market after that downturn in 2008/2009? Then there is a good possibility that you have too much now. With many people seeing a full recovery in their IRA and then some, it might be a good idea to look at this as a second chance opportunity to make some level headed decisions. As always, it is prudent to be prepared for all market contingencies and now would be a good time to make sure you’re ready.
But, let’s not be a spoilsport. It’s fantastic that so many people rode out the financial storm and came out the other side with more money. That kind of patience is admirable and already places them ahead of the pack when it comes to investment planning. So, while it is important to remind people to be sure to review, it’s also a good time to say congratulations and nice job.