Pity the lowly IRA.
Savers would rather set aside their cash for any other goal—including a beach vacation or a nice refrigerator—than put money in an individual retirement account, or IRA, according to a new survey by TIAA-CREF.
Only 8 percent of savers listed contributing to an IRA as their first priority, which is roughly the same percentage of people who had no idea what their top savings goal was.
"People are not relating to IRAs," said Dan Keady, director of financial planning at TIAA-CREF. "They are seeing the information, but not connecting with what IRA contributions can do for them down the road."
Only 18 percent of those surveyed are currently contributing to an IRA.
A lack of understanding about what exactly an IRA is may diminish enthusiasm for them.
Individual retirement accounts come in two types. A traditional IRA lets savers contribute pretax dollars to an investment account so contributions can grow without capital gains and dividend taxes, but withdrawals from the account are taxed.
With a Roth IRA, people contribute after-tax income to an account, contributions grow tax-deferred and withdrawals are tax-free.