Retirement assets grew nearly 3% from the prior quarter and stood at $29.2 trillion as of Sept. 30, according to the latest data from the Investment Company Institute. ICI also says that U.S. retirement assets now account for one-third of all household financial assets.
|Individual retirement accounts
Assets in individual retirement accounts totaled $9.5 trillion at the end of the third quarter, a jump of 3% from the second quarter. Defined contribution plan assets ended the period at $8.1 trillion, up 3.3% from June 30.
|Defined benefit plans
Government defined benefit plans (including federal, state and local government plans) were $6.1 trillion in Q3, a 2.9% increase from the earlier quarter. Also, private-sector DB plans held $3.2 trillion of assets, with annuity reserves outside of retirement accounts accounting for another $2.3 trillion.
|Defined contribution plans
For employer-sponsored DC plans, assets totaled $8.1 trillion as of Q3 — of which $5.6 trillion were held in 401(k) plans.
Other private-sector DC plans accounted for $550 billion, with $1.0 trillion in 403(b)s, $332 billion in 457s, and $606 billion in the Federal Employees Retirement System's Thrift Savings Plan.
Mutual funds represented $3.7 trillion — or slightly more than two-thirds — of assets in 401(k) plans at the end of Q3. Equity funds, the most common type held in 401(k)s, accounted for $2.3 trillion of that, with hybrid funds —including target-date funds — accounting for $1.0 trillion.
|IRAs
The Q3 total for IRAs amounted to $9.5 trillion in assets, with close to half ($4.5 trillion) held in mutual funds. Equity funds were the most common category of funds held in IRAs, at $2.6 trillion; they were followed by hybrids, at $949 billion.
|Target-date funds
TDFs accounted for $1.2 trillion as of the end of Q3, an increase of 4.0% from Q2. Retirement accounts held the bulk of TDF assets, with more than 85% held in DC plans (67% of the total) and IRAs (20%).
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Janet Levaux
Editor-in-Chief Janet Levaux has covered the financial markets since 1991, with a focus on financial advisors since 2005. After graduating from Yale and the Johns Hopkins School of Advanced International Studies (SAIS), where she studied global economics, Janet worked as a freelance financial and business writer in Japan, and then as a reporter and editor for Investor's Business Daily and the Bay Area News Group in California. She earned an MBA in 2007 and since then has helped lead key ThinkAdvisor projects like its Neal-Award winning reporting on Ken Fisher, Luminaries awards program and Women in Wealth newsletter.
