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IRAs hit record at Fidelity
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May 6, 1999: 5:53 p.m. ET
Fund giant says 300,000 new accounts open; contributions total $1.3B
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NEW YORK (CNNfn) - Investors opened more than 300,000 new IRAs with Fidelity Investments this year, the company said Thursday.
Fidelity took in a total of $1.3 billion in retirement assets as of April 15, an increase of $441 million over last year and a record high, the fund giant said.
The company said its IRA business has grown 50 percent, largely because of the Roth IRA, approved by Congress in 1997.
In a conventional IRA, you can deduct your contributions, but you pay taxes when you withdraw the money. In a Roth IRA, open to people in certain income brackets, you can't deduct the contributions but the money is tax-free when you withdraw it.
Contributions to Roth IRAs in 1998, the first year the accounts were available, were $674 million.
A recent Fidelity survey found that out of 27 percent of Americans who have IRAs, only 5 percent are Roth accounts.
The survey also found that one-third of the Americans who don't have any type of IRA assume the Roth IRA is too confusing.
"The new Roth IRA is a great option for many people but certainly adds a new level of complexity," said Stephen Mitchell, senior vice president at Fidelity.
One in four people surveyed said they didn't have any money to set aside for retirement.
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