Overall retirement assets were $31.9 trillion as of June 30, up 11.2% from March, the Investment Company Institute reported in its latest tally.
Assets in individual retirement accounts (IRAs) totaled $10.8 trillion, an increase of 13.5% from the end of the first quarter.
Defined contribution (DC) plan assets were $8.9 trillion at the end of the second quarter, up 11.6%.
Government defined benefit (DB) plans—including federal, state, and local government plans—held $6.5 trillion in assets as of the end of June 2020, an 8.6% increase from March.
Private-sector DB plans held $3.4 trillion, and annuity reserves outside of retirement accounts accounted for another $2.3 trillion.
Defined contribution plans
Americans held $8.9 trillion in all employer-based DC retirement plans, of which $6.3 trillion was held in 401k plans.
In addition to 401k plans, at the end of the second quarter, $555 billion was held in other private-sector DC plans, $1.1 trillion in 403(b) plans, $345 billion in 457 plans, and $641 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $3.8 trillion, or 61%, 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 $10.8 trillion in assets at the end of the second quarter. Forty-three percent of IRA assets, or $4.7 trillion, was invested in mutual funds.
With $2.5 trillion, equity funds were the most common type of funds held in IRAs, followed by $935 billion in hybrid funds.
Other developments
As of June 30, total U.S. retirement entitlements were $38 trillion, including $31.9 trillion of retirement assets and another $6.2 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 June.
Unfunded liabilities are a larger issue for government DB plans than for private-sector DB plans.
As of the end of the second quarter of 2020, unfunded liabilities were 5% of private-sector DB plan entitlements, 48% of state and local government DB plan entitlements, and 47% 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.
