Individual Retirement Accounts can be an important part of your retirement plan, especially if you don’t have an employer-sponsored 401(k) or 403(b).

But the fifth annual TIAA IRA survey indicates that a surprising number of people don’t understand them, especially millennials. And of those who do understand them, many say they simply cannot afford to save another dime.

It all translates into the need for more and better financial education, according to the folks at TIAA.

Dan Keady, a senior director at TIAA, says one thing that surprised him was the response to the question of what people would do if they had an additional $5,000.

“Many people said they were looking to pay down debt, and some people said they would put it into emergency savings,” he says. “I was surprised that we were down to 6 percent who could contribute it to an IRA.”

Some interesting statistics:

  • 25 percent said they do not know enough about IRAs.
  • 46 percent said they can’t save any more than they already do.

Thirty-five percent of millennial respondents who aren’t contributing to an IRA said they don’t know enough about them to consider using one. Gen X respondents, meanwhile, were more likely to say they didn’t have enough money to save more than they already do. That’s not surprising, says TIAA, because there are a many competing priorities for this group (ages 36 to 51).

“We saw a situation where a lot of folks said they don’t know enough about IRAs,” Keady says. “It’s still a big percentage. Even those people who understood an IRA, 46 percent said they don’t have enough money to save more than they already do. Some folks may be tapped out. Even those that have enough money, a quarter are saying they don’t know enough about IRAs.”

One thing people should consider when they are choosing an IRA: Whether the IRA company also provides financial advice, he says. Only 36 percent of the people surveyed said access to financial advice is important when they evaluate possible IRAs.

“When you go through an (financial) advice session, it makes it easier to take the theory and say how do I apply it to my life and my family,” Keady says. “When they chose a provider, people need to see if they get that advice component.”

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Question of the week

I got such a huge response to last week’s question on Social Security, that we’ll continue to print those responses next week. So no new question this week.

Would you change the age you started taking Social Security benefits if you could?  Send comments to Please include your name, city and state. In the subject line put “Social Security.”

Paul Dawson of Matawan, N.J., wrote:

While my wife and I both plan on waiting until age seventy to collect, the driving factor is the value to my wife if something happens to me at any point after age 70.  As the larger wage earner, and always at the maximum contribution rate, she would collect over $44,000 on my benefit, versus $33,500 if I began collecting at age 66. As a CPA, the decision came down to math, statistics and the means to make that decision.

Within the current interest environment, the 8% build each year more than offsets the reduction in principal to cover expenses during the interim period.  And the draw down on an IRA accounts lowers the balance that is subject to the RMD (required minimum distribution) at age 70.

Stephen Brodeur of Woburn, Mass.:

I’ll delay taking SS as long as I can, as long as I’m healthy. If my health degrades substantially between now and my 60s (I’m 57), or if I am forced to claim because of financial distress, then I’ll start earlier. But my plan is to wait it out to at least ‘normal’ retirement age for me (66 years, 10 months?), and preferably til 70.

Thanks for your article.

Karen Gruner wrote:

I am delaying SS. I am struck by the comment that health problems started earlier than expected for some, forcing early retirement. While some people just get a bad genetic hand dealt, most people can take an honest look in the mirror and predict early health issues. The obesity epidemic is a serious contributor to early health issues. And, for most people, has a straightforward solution with the result being a more financially and physically comfortable retirement.

Sue Clayton of Bamberg, S.C.:

I recently retired at 62, and although I know I could have received a higher benefit by waiting, I have no regrets.  The company where I worked 40 years had been bought out several times; the last made the job unbearable and I cannot see myself staying there another four years. The money isn’t worth it.

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Write Brooks at The Washington Post, 1301 K St. NW, Washington, D.C., 20071, or On Twitter @Perfiguy. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more, go to