About half of all IRA holders said they never contributed money into their accounts, meaning their entire balances came from rollovers, the report noted. Of all IRA-owning households, roughly three in five had at least some money from rollovers.
Only 11% of U.S. households contributed money to IRAs in the most recent year examined.
Rollovers become important when people change jobs or retire. Some employers don't let former workers keep assets in their 401(k) plans, and new employers don't always accept dollars from other plans. In such cases, it makes sense to switch the money into a rollover IRA. These accounts can be set up at thousands of brokerages, mutual fund companies or other investment firms that serve as custodians.
"If you receive a payout from your company because you have retired, resigned, were laid off, downsized or whatever, rolling over to an Individual Retirement Account would definitely be to your advantage in most cases," wrote Don and David Wilkinson, authors of a new book, Rollover.
