For what it’s worth, in the time before the coronavirus craziness, total U.S. retirement assets were $32.3 trillion as of December 31, up 5% from the end of September and up 16.4% for the year.
Investment Company Institute reports that retirement assets accounted for 34% of all household financial assets in the United States at the end of December.
Assets in individual retirement accounts totaled $11 trillion at the end of the fourth quarter, an increase of 5.3% from the end of the third quarter.
Defined contribution plan assets were $8.9 trillion, up 4.8% from September 30.
Government defined benefit plans—including federal, state, and local government plans—held $6.7 trillion in assets, a 5.4% increase.
Private-sector DB plans held $3.4 trillion in assets, and annuity reserves outside of retirement accounts accounted for another $2.3 trillion.
Defined contribution plans
Americans held $8.9 trillion in all employer-sponsored DC retirement plans on December 31, of which $6.2 trillion was held in 401(k) plans.
In addition to 401(k) plans, at the end of the fourth quarter, $560 billion was held in other private-sector DC plans, $1.1 trillion in 403(b) plans, $351 billion in 457 plans, and $654 billion in the Federal Employees Retirement System’s Thrift Savings Plan.
Mutual funds managed $4 trillion, or 65%, of assets held in 401(k) plans.
With $2.4 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $1.1 trillion in hybrid funds, which include target-date funds.
Individual retirement accounts
IRAs held $11 trillion in assets, with 44%, or $4.8 trillion, invested in mutual funds.
With $2.7 trillion, equity funds were the most common type of funds held in IRAs, followed by $1 trillion in hybrid funds.
Other developments
As of December 31, 2019, total U.S. retirement entitlements were $38.1 trillion, including $32.3 trillion of retirement assets and another $5.7 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 at the end of December.
Unfunded liabilities are a larger issue for government DB plans than for private-sector DB plans. As of the end of the fourth quarter of 2019, unfunded liabilities were 1% of private-sector DB plan entitlements, 46% of state and local government DB plan entitlements, and 45% 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.
