401(k) Rollovers Dominate IRA Growth, Not Direct Contributions

IRAs hold about $19.2 trillion while 401(k)s hold $10.1 trillion, and most IRA assets come from rollovers of workplace plans rather than new contributions (2023 saw $682B rolled into IRAs vs $89B in direct contributions). Aging baby boomers and the desire to consolidate accounts are driving rollover growth, with Cerulli projecting hundreds of billions more in rollover money in the coming years. While rollovers can simplify finances and access a wider range of investments, they forego some 401(k) protections and aren’t always the best move for every saver; keeping some funds in a 401(k) can still be prudent.