Retirement account balances continued their post-pandemic recovery in the first quarter, up 1.8% from December, and totaled $35.4 trillion. Retirement assets accounted for 32% of all household financial assets in the United States, according to the Investment Company Institute.
Assets in individual retirement accounts (IRAs) totaled $12.6 trillion, an increase of 2.8% from the end of the fourth quarter of 2020.
Government defined benefit (DB) plans—including federal, state, and local government plans—held $7.1 trillion in assets, a 0.7% increase. Private-sector DB plans held $3.4 trillion in assets, and annuity reserves outside of retirement accounts accounted for another $2.5 trillion.
Defined contribution plans
Americans held $9.9 trillion in all employer-based DC retirement plans as of March, up 2.1%, of which $6.9 trillion was held in 401k plans. In addition to 401k plans, at the end of the first quarter, $610 billion was held in other private-sector DC plans, $1.2 trillion in 403(b) plans, $391 billion in 457 plans, and $762 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $4.6 trillion, or 66%, of assets held in 401k plans at the end of March 2021. With $2.7 trillion, equity funds were the most common type of funds held in 401k plans, followed by $1.3 trillion in hybrid funds, which include target-date funds.
Individual retirement accounts
IRAs held $12.6 trillion in assets at the end of the first quarter of 2021. Forty-five percent of IRA assets, or $5.6 trillion, were invested in mutual funds. With $3.2 trillion, equity funds were the most common type of funds held in IRAs, followed by $1.1 trillion in hybrid funds.
Other developments
As of March 31, target-date mutual fund assets totaled $1.7 trillion, up 4.7% from December 2020. Retirement accounts held the bulk (85%) of target-date mutual fund assets, with 67 percent held through DC plans and 18 percent held through IRAs.
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.
