Not bad, all things considered. Total U.S. retirement assets were $28.7 trillion as of March 31, down 11.9% from December 2019.
Retirement assets accounted for 33% of all household financial assets in the United States at the end of March, according to the Investment Company Institute.
Assets in individual retirement accounts (IRAs) totaled $9.5 trillion at the end of the first quarter, a decrease of 13.7% from the end of the fourth quarter of 2019.
Defined contribution (DC) plan assets were $7.9 trillion, down 12.3% from December.
Government defined benefit (DB) plans— including federal, state, and local government plans—held $5.9 trillion in assets as of the end of March, an 11.1% decrease from the end of December.
Private-sector DB plans held $3.2 trillion in assets at the end of the first quarter of 2020, and annuity reserves outside of retirement accounts accounted for another $2.2 trillion.
Defined Contribution Plans
Americans held $7.9 trillion in all employer-based DC retirement plans in March, of which $5.6 trillion was held in 401(k) plans.
In addition to 401k plans, at the end of the first quarter, $490 billion was held in other private-sector DC plans, $988 billion in 403(b) plans, $305 billion in 457 plans, and $580 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $3.3 trillion, or 59%, of assets held in 401k plans. With $1.8 trillion, equity funds were the most common type of funds held in 401k plans, followed by $939 billion in hybrid funds, which include target date funds.
Individual Retirement Accounts
IRAs held $9.5 trillion in assets at the end of the first quarter. Forty-three percent of IRA assets, or $4.1 trillion, was invested in mutual funds.
With $2.1 trillion, equity funds were the most common type of funds held in IRAs, followed by $839 billion in hybrid funds.
Other Developments
Total U.S. retirement entitlements in March were $35.7 trillion, including $28.7 trillion of retirement assets and another $6.9 trillion of unfunded liabilities. Including both retirement assets and unfunded liabilities, retirement entitlements accounted for 41% of the financial assets of all U.S. households at the end of March.
Unfunded liabilities are a larger issue for government DB plans than for private-sector DB plans. As of the end of the first quarter of 2020, unfunded liabilities were 11% of private-sector DB plan entitlements, 55% of state and local government DB plan entitlements, and 46% of federal DB plan entitlements.
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.
