Total U.S. retirement assets were $33.1 trillion as of September 30, 2020, up 4% from June 30. Retirement assets accounted for 34% of all household financial assets in the United States.
The Investment Company Institute reports that assets in individual retirement accounts (IRAs) totaled $11.3 trillion, an increase of 5.1% from the end of the second quarter. Defined contribution (DC) plan assets were $9.3 trillion at the end of the third quarter, up 4.4% from June 30, 2020.
Government defined benefit (DB) plans—including federal, state, and local government plans—held $6.7 trillion in assets, a 3.8% increase from the end of June. Private-sector DB plans held $3.4 trillion in assets, and annuity reserves outside of retirement accounts accounted for another $2.4 trillion.
Defined contribution plans
Americans held $9.3 trillion in all employer-based DC retirement plans on September 30, 2020, of which $6.5 trillion was held in 401k plans. In addition to 401k plans, at the end of the third quarter, $575 billion was held in other private-sector DC plans, $1.1 trillion in 403b plans, $360 billion in 457 plans, and $675 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $4 trillion, or 62%, of assets held in 401k plans. With $2.3 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 $11.3 trillion in assets. Forty-three percent of IRA assets, or $4.9 trillion, was invested in mutual funds. With $2.7 trillion, equity funds were the most common type of funds held in IRAs, followed by $973 billion in hybrid funds.
Target-date funds
As of September 30, 2020, target-date mutual fund assets totaled $1.4 trillion, up 5.3%. Retirement accounts held the bulk (85%) of target-date mutual fund assets, with 67% 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.
