That’s trillion with a capital “T.” The Investment Company Institute reports that Americans held $6.8 trillion in all employer-based defined contribution retirement plans in Q2 2015, of which $4.7 trillion was held in 401(k) plans. . In addition to 401(k) plans, at the end of the second quarter:
- $537 billion was held in other private-sector DC plans,
- $872 billion in 403(b) plans, $266 billion in 457 plans,
- $441 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP),
- Mutual funds managed $3.8 trillion, or 56 percent, of assets held in DC plans at the end of June.
IRAs held $7.6 trillion in assets at the end of the second quarter, about unchanged from the end of the first quarter of 2015. Forty-eight percent of IRA assets, or $3.6 trillion, was invested in mutual funds.
Target date mutual fund assets totaled $761 billion, an increase of 2.7 percent in the second quarter. Retirement accounts held the bulk of target date mutual fund assets: 88 percent of target date mutual fund assets were held through DC plans and IRAs.
Total U.S. retirement assets were $24.8 trillion, about unchanged from the end of March. The new estimate of $24.8 trillion for March reflects a slight downward revision based on new information. Retirement assets accounted for 36 percent of all household financial assets in the United States at the end of the second quarter of 2015.
Assets in individual retirement accounts (IRAs) totaled $7.6 trillion at the end of the second quarter of 2015, an increase of 0.4 percent from the end of the first quarter. Defined contribution (DC) plan assets rose 0.4 percent in the second quarter to $6.8 trillion. Government defined benefit (DB) plans— including federal, state, and local government plans — held $5.2 trillion in assets as of the end of June, a 0.3 percent decrease from the end of March. Private-sector DB plans held $3.0 trillion in assets at the end of the second quarter of 2015, and annuity reserves outside of retirement accounts accounted for another $2.1 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.
