No doubt market appreciation had quite a bit to do with it, but total U.S. retirement assets accounted for $27.9 trillion as of December 31, up 3.4 percent from the previous quarter and 11.1 percent for the year.
The latest Investment Company Institute data finds that Americans held $7.7 trillion in all employer-based DC retirement plans, of which $5.3 trillion was held in 401k plans.
In addition to 401k plans, $540 billion was held in other private-sector DC plans, $993 billion in 403b plans, $321 billion in 457 plans, and $563 billion in the Federal Employees Retirement System’s Thrift Savings Plan.
Mutual funds managed $3.5 trillion, or 67 percent, of assets held in 401k plans. With $2.1 trillion, equity funds were the most common type of funds held in 401k plans, followed by $971 billion in hybrid funds, which include target date funds.
As of December 31, 2017, target date mutual fund assets totaled $1.1 trillion, up 5.8 percent in the fourth quarter and up 25.8 percent for the year. Retirement accounts held the bulk of target date mutual fund assets: 87 percent of target date mutual fund assets were held through DC plans (67 percent of the total) and IRAs (20 percent) at year-end 2017.
Assets in individual retirement accounts totaled $8.9 trillion, an increase of 4 percent from the end of the third quarter.
Government defined benefit (DB) plans—including federal, state, and local government plans—held $6 trillion in assets as of the end of December, a 3.8 percent increase from the end of September. Private-sector DB plans held $3.1 trillion in assets at the end of the fourth quarter of 2017, and annuity reserves outside of retirement accounts accounted for another $2.2 trillion.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and 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. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.