Those low numbers you often hear regarding IRA balances aren't quite as bleak as they sound.

Average IRA balances are a third higher when the calculations are based on a person's total savings across all IRA accounts. Many statistics that are quoted on retirement savings are based on balances in each IRA account.

The difference is important because it gives a clearer picture of how important IRAs are to retirement savings, says Dr. Craig Copeland, author of a report that revealed the difference.

Copeland, who is a research associate for the Employee Benefit Research Institute (EBRI) in Washington, is the author of Individual Retirement Account Balances, Contributions, and Rollovers, 2010: The EBRI IRA Database, released in May and based on the latest numbers available. The EBRI conducted a similar study based on 2008 numbers.

The report also shows that IRA balances continued to increase across all ages and genders, whether the calculations are based on separate accounts or totals for individual people.

"IRAs are a vital component of U.S. retirement savings," says EBRI, constituting 26.5% of all retirement holdings. There are nearly 15 million IRA accounts held by more than 11 million people with total assets of just over $1 trillion.

The average person's IRA accounts in 2010 had a total balance of $91,864 and the median value was $25,296. This is about one third more for the average and more than 40% more for the median than if the numbers are based on individual accounts. Basing calculations on individual accounts underestimates the importance of IRAs to people's retirement savings, EBRI says.

The average for individual accounts in 2010 was $67,438 and the median was $17,863. "When people are looking at how much is reported on the basis of separate accounts, it is not reflective of the total assets that people have in IRAs," says Copeland. "It is a significant difference if you want to understand the importance of IRAs to retirement savings."

At the same time, both methods of calculating IRA holdings represent an increase over 2008, the report shows. The average IRA total balance in all a person's accounts increased more than 32% over those two years and the median balance increased 26.2%. The average individual account balance increased 22.9% and median increased 13.4%.

In traditional and Roth IRAs, only 12% of people owning these accounts contributed money to them in 2010. The average contribution was $3,335. Roth IRAs were more likely to receive contributions from younger people (those 25 to 34 years of age) than traditional IRAs.

Copeland feels the popularity of Roth IRAs among younger savers is due to tax implications. "They are paying tax on the money now, when it is probably a lower rate than when they will withdraw the money," he says.

Of those people making contributions to an IRA, 43.5% contributed the maximum amount allowed. Copeland notes that the low rate of contributions is probably due to the fact that IRAs are used as ways to hold money that is rolled over from an employee's account when he or she changes jobs.

"The employee will probably contribute to the new employer's savings plan, particular if there is a company match, and use the IRA just to hold the other money," he says.

The majority of individuals owning IRAs have traditional IRAs (64.6%) compared with Roth IRAs or SEP (Simplified Employee Pensions) or Simple (Savings Incentive Match Plan for Employees) accounts.

-Karen DeMasters