After all the recent market craziness, will 401(k) assets continue their climb?
Total U.S. retirement assets were $29.2 trillion as of September 30, a 2.8 percent jump the previous quarter, according to the Investment Company Institute.
Retirement assets accounted for 33 percent of all household financial assets.
Defined contribution plan assets were $8.1 trillion, up 3.3 percent, of which $5.6 trillion was held in 401k plans, an increase from $5.3 trillion in June.
In addition to 401(k) plans, $550 billion was held in other private-sector DC plans, $1 trillion in 403b plans, $332 billion in 457 plans, and $606 billion in the Federal Employees Retirement System’s Thrift Savings Plan.
Mutual funds managed $3.7 trillion, or 67 percent, of assets held in 401k plans at the end of September.
With $2.3 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $1 trillion in hybrid funds, which include target date funds.
Target date mutual fund assets totaled $1.2 trillion, up 4 percent from June. Retirement accounts held the bulk of target date mutual fund assets. Eighty-seven percent of these assets were held through DC plans (67 percent of the total) and IRAs (20 percent).
Assets in individual retirement accounts totaled $9.5 trillion, an increase of 3 percent from the end of the second quarter.
Forty-seven percent of IRA assets, or $4.5 trillion, was invested in mutual funds. With $2.6 trillion, equity funds were the most common type of funds held in IRAs, followed by $949 billion in hybrid funds.
Government defined benefit plans—including federal, state, and local government plans—held $6.1 trillion in assets, a 2.9 percent increase from the end of June 2018.
Private-sector DB plans held $3.2 trillion in assets at the end of the third quarter of 2018, and annuity reserves outside of retirement accounts accounted for another $2.3 trillion.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 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.
