Study: Younger Seniors Drawing Down IRAs at Rapid Pace

Thursday, 16 May 2013 01:36 PM

By Melanie Batley

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Young senior citizens could be caught short in old age because they're spending their retirement funds at a rapid pace, a new study has found.

According to Bloomberg Businessweek, findings from the nonprofit Employee Benefit Research Institute show that 48 percent of people age 61 to 70 in the bottom half of incomes withdrew up to 17 percent from their IRA retirement accounts during each year between 2002 and 2010.

Meanwhile, 29 percent of those in the top quarter of incomes drew out as much as 12 percent each year.

The institute study found that older seniors, aged 71 and up, tended to be more frugal, often withdrawing the minimum amount required by the Internal Revenue Service. Thirty-two percent of the older seniors put their withdrawals into other forms of savings.

The study also found that 80 percent to 90 percent of people in their 80s took only the required minimum distribution from their IRAs.

The institute researchers suggested those older seniors might be saving a little too much.
"Some [seniors] may be overly cautious in drawing down their IRA balances, sacrificing a more enjoyable retirement," they said in the report.

 

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