The individual retirement account has solidified its position as the primary vehicle for American retirement savings, amassing approximately $19.2 trillion by the close of 2025, according to the Investment Company Institute. That figure nearly doubles the $10.1 trillion held in 401(k) plans, underscoring a structural shift in where retirement wealth accumulates.
Annual contributions to IRAs remain modest—capped at $7,500 in 2026—but the real driver of growth is the massive transfer of assets from employer-sponsored plans. Cerulli Associates projects that investors will roll roughly $941 billion into IRAs in 2026, with that number climbing to $1.3 trillion by 2031. The wave is propelled by Baby Boomers reaching traditional retirement age at a rate of more than 11,000 Americans turning 65 each day in 2026, per the Alliance for Lifetime Income.
Rollover Dominance
The U.S. retirement system's design makes large-scale rollovers almost inevitable. While annual IRA contribution limits are low, 401(k) balances built over decades can reach hundreds of thousands of dollars. The ICI reports that about 61% of traditional IRA-owning households hold assets originally from employer plans. Vanguard's How America Saves 2026 report, analyzing millions of defined contribution plan participants, found that 94% of all plan assets available for distribution in 2025 were preserved for retirement—either rolled over to an IRA or another qualified plan, or left in the former employer's plan. Among those who separated from service in 2025, 36% chose to roll assets to an IRA or new employer plan, the highest rollover rate in a decade. Only 5% of eligible assets were taken as cash.
Preservation behavior correlates strongly with account size. Vanguard found that seven in 10 participants with balances under $1,000 kept savings in a tax-deferred account, but once balances exceeded $100,000, nine in 10 participants preserved their assets.
Fidelity Data Shows Momentum
Fidelity's first-quarter 2026 retirement analysis, covering more than 54 million IRA, 401(k), and 403(b) accounts, revealed total IRA contributions surged 29% year-over-year. The number of account holders contributing also hit a record, up 28% from Q1 2025. Roth accounts are driving much of the activity: 67% of all IRA contributions at Fidelity went into Roth IRAs, and Roth conversion transactions climbed 41% year-over-year. Gen Z led IRA growth by age cohort, with contributions increasing 65% year-over-year, followed by Millennials at 31%. The average IRA balance at Fidelity stood at $131,380 as of March 31, down 4% from Q4 2025 due to market volatility, but up 7% from a year earlier.
“Retirement savers started the year strong with record-high savings rates and contributions, reflecting the long-term approach they're taking with retirement preparedness,” said Sharon Brovelli, president of Workplace Investing at Fidelity Investments.
Opportunities and Risks for Advisors
For financial advisors, the rollover market represents a critical client touchpoint. Moving assets from a workplace plan to an IRA offers greater investment flexibility and often easier access to distributions. However, it also opens the door to potential conflicts of interest. The Biden administration's fiduciary rule, introduced in 2024 to raise advice standards for rollover recommendations, was struck down in federal court, and the Trump administration declined to defend it. That leaves the regulatory landscape uncertain, particularly for clients transitioning from low-cost institutional plans to retail IRAs with varying fees and product options.
Another complication: under current tax law, only traditional IRA assets can be rolled into a new employer's 401(k). Roth dollars leaving a workplace plan become stranded in a Roth IRA, unable to follow the participant. The Portability Services Network—including Fidelity, Vanguard, and Alight Solutions—has flagged this as a systemic gap. Advisors should also consider how rollovers interact with broader retirement income planning, especially as many participants lack a withdrawal strategy. A recent TIAA-Nuveen survey found that 78% of 401(k) participants have no formal withdrawal plan, even as $8 trillion accumulates in these accounts.
The rollover wave also intersects with other retirement challenges. For instance, BlackRock data shows that emergency savings gaps are driving 401(k) raids, stifling new contributions. Advisors who help clients build emergency buffers may reduce the temptation to cash out retirement assets prematurely.
