Good news to close out the year, as just-released research finds total 401(k) assets surged ahead in the third quarter to reach almost $6 trillion in assets.
In total, U.S. retirement assets overall were $30.1 trillion as of September 30, up 0.9% from June.
Retirement assets accounted for 33% of all household financial assets in the United States, according to Investment Company Institute statistics.
Americans held $8.5 trillion in all employer-based DC retirement plans on September 30, of which $5.9 trillion was held in 401k plans.
In addition to 401k plans, at the end of the third quarter, $540 billion was held in other private-sector DC plans, $1.1 trillion in 403(b) plans, $342 billion in 457 plans, and $624 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $3.8 trillion, or 64%, of assets held in 401k plans. With $2.2 trillion, equity funds were the most common type of funds held in 401k plans, followed by $1.1 trillion in hybrid funds, which include target-date funds.
Individual retirement accounts
IRAs held $9.8 trillion in assets at the end of the third quarter of 2019. Forty-six percent of IRA assets, or $4.5 trillion, was invested in mutual funds.
With $2.5 trillion, equity funds were the most common type of funds held in IRAs, followed by $955 billion in hybrid funds.
Entitlements
As of September 30, total U.S. retirement entitlements were $36.2 trillion, including $30.1 trillion of retirement assets and another $6.1 trillion of unfunded liabilities.
Including both retirement assets and unfunded liabilities, retirement entitlements accounted for 40% of the financial assets of all U.S. households.
Unfunded liabilities are a larger issue for government DB plans than for private-sector DB plans. As of the end of the third quarter, unfunded liabilities were 5% of private-sector DB plan entitlements and 48% of both state and local government DB plan entitlements and federal DB plan entitlements.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.