Good news to close out the year, as just-released research finds total 401(k) assets surged ahead in the third quarter to reach almost $6 trillion in assets.
In total, U.S. retirement assets overall were $30.1 trillion as of September 30, up 0.9% from June.
Retirement assets accounted for 33% of all household financial assets in the United States, according to Investment Company Institute statistics.
Americans held $8.5 trillion in all employer-based DC retirement plans on September 30, of which $5.9 trillion was held in 401k plans.
In addition to 401k plans, at the end of the third quarter, $540 billion was held in other private-sector DC plans, $1.1 trillion in 403(b) plans, $342 billion in 457 plans, and $624 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $3.8 trillion, or 64%, of assets held in 401k plans. With $2.2 trillion, equity funds were the most common type of funds held in 401k plans, followed by $1.1 trillion in hybrid funds, which include target-date funds.
Individual retirement accounts
IRAs held $9.8 trillion in assets at the end of the third quarter of 2019. Forty-six percent of IRA assets, or $4.5 trillion, was invested in mutual funds.
With $2.5 trillion, equity funds were the most common type of funds held in IRAs, followed by $955 billion in hybrid funds.
Entitlements
As of September 30, total U.S. retirement entitlements were $36.2 trillion, including $30.1 trillion of retirement assets and another $6.1 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.
Unfunded liabilities are a larger issue for government DB plans than for private-sector DB plans. As of the end of the third quarter, unfunded liabilities were 5% of private-sector DB plan entitlements and 48% of both state and local government DB plan entitlements and 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.
