Many investors missing out on long-term IRA benefits

When it comes to retirement planning, most of the focus is placed on 401(k)s. The reality is that individual retirement accounts represent the largest share of America’s savings.

At the end of 2012, IRAs had $5.4 trillion in assets compared with $5.1 trillion in 401(k)s and other defined contribution plans. About 40 percent of U.S. households own at least one type of IRA, which offers tax incentives to save for retirement.

Many IRA holders are left to their own devices to manage their accounts. Some investors are take-charge types with the ability to maximize savings without taking on too much risk. But in many other instances, portfolio management is hit-or-miss, with little attention to selecting an appropriate mix of investments.

"Many individuals are still missing out on the long-term savings benefits of IRAs, simply because they don’t understand what they are and how they work," says Dan Keady, director of financial planning for TIAA-CREF, a financial services company. In a recent telephone survey of 1,008 adults, his company found that nearly half of the respondents lacked a basic knowledge.

IRAs provide individuals not covered by workplace retirement plans with an opportunity to save on a tax-advantaged basis on their own. The money put into a traditional IRA can be deducted from the account holder’s taxable income for that year, and the money isn’t taxed until it’s withdrawn at retirement.

With so many IRA holders managing accounts on their own, approaches vary widely, often to the detriment of long-term savings.

For example, surveys by the fund industry’s trade organization, the Investment Company Institute, found that low-yielding money-market mutual funds make up a larger proportion of IRA portfolios than is typically considered appropriate. The ICI found that IRA holders in their 60s had invested nearly 25 percent of their portfolios in low-yielding money funds. That’s four times larger than the average allocation to money funds in 401(k)s owned by people in their 60s.

Total recall

About 13,000 Louisville Slugger OneX Fastpitch softball bats have been recalled. The bats include all OneX style bats. The composite bat has a white and gray shell with blue and yellow lettering. "Louisville Slugger oneX" appears twice on the barrel, in yellow in one place and in blue lettering on the other side. The "X" is yellow in both places. They were sold from May 2012 through February 2013.

The bat’s barrel can separate from the handle during use and strike people nearby.

Call Hillerich & Bradsby at 800-282-2287 or visit www.slugger.com and click on "Recall."