Americans Leave 30% of IRA Rollovers in Cash for 7 Years as 55% of Contributions Sit Idle
Updated
Updated · 24/7 Wall St. · Jun 1
Americans Leave 30% of IRA Rollovers in Cash for 7 Years as 55% of Contributions Sit Idle
2 articles · Updated · 24/7 Wall St. · Jun 1
Nearly 30% of IRA rollovers stay uninvested in cash for seven years, while 55% of direct retirement-plan contributions sit in cash for 12 months before reaching funds or ETFs.
That inactivity can sharply erode wealth: $10,000 at a 0.38% savings rate grows to $10,387 in 10 years, versus $22,196 at an 8% annual return.
Market data underscores the gap — SPY returned 175.51% over the same seven-year window, while even Vanguard’s bond ETF gained 9.57%; 52-week Treasury bills now yield 3.80%.
Inflation makes idle balances worse in real terms: with headline PCE at 3.77% and core PCE at 3.29% in April, $100 of cash shrinks to $74 of purchasing power in 10 years.
The report links the freeze to weak sentiment and tighter household finances, and urges savers to cap emergency cash at 3 to 6 months of expenses and move retirement money into diversified funds.
Billions in retirement savings are uninvested due to fear. What one simple strategy can bypass anxiety and automate your financial growth?
What silent financial threat is eroding your retirement savings, and is your cash hoard actually making it worse?
You've saved for retirement, but what is the crucial second step that separates modest savings from real wealth?