Total Retirement Assets Fell in Q3 2022

retirement assets report

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New data from the Investment Company Institute (ICI) shows U.S. retirement assets were $32.3 trillion as of September 30, down from 4.5% three months before in June.

The ICI research found retirement assets accounted for 30% of all household financial assets in the U.S. at the end of September 2022.

Defined contribution plans

According to the data, Americans held $8.9 trillion in all employer-sponsored defined contribution retirement plans on September 30, of which $6.3 trillion was held in 401(k) plans. In addition to 401(k) plans, at the end of the third quarter, $515 billion was held in other private-sector DC plans, $1.1 trillion in 403(b) plans, $350 billion in 457 plans, and $714 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 at the end of September 2022. With $2.2 trillion, ICI found that 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

Individual retirement accounts (IRAs) totaled $11 trillion at the end of the third quarter of 2022, falling 5.3% from the end of the second quarter, reported ICI. Forty-three percent of IRA assets, or $4.8 trillion, were invested in mutual funds. Equity funds held $2.6 trillion, thus making them the most common type of funds held in IRAs, followed by $944 billion in hybrid funds.

Chart courtesy Investment Company Institute, The U.S. Retirement Market, Third Quarter 2022.

Defined benefit plans

Government defined benefit (DB) plans—including federal, state, and local government plans—held $7.2 trillion in assets as of the end of September, a 2.9% decrease from the end of June. Private-sector DB plans held $3.0 trillion in assets at the end of the third quarter of 2022, and annuity reserves outside of retirement accounts accounted for another $2.1 trillion.

U.S. total retirement entitlements

As of September 30, total U.S. retirement entitlements were $39.2 trillion, including $32.3 trillion of retirement assets and another $6.9 trillion of unfunded liabilities, reported ICI. Including both retirement assets and unfunded liabilities, retirement entitlements accounted for 36% of the financial assets of all U.S. households at the end of September. 

Lastly, ICI reports that as of the end of the third quarter of 2022, unfunded liabilities were 48% of benefit entitlements for state and local government DB plans, 41% of benefit entitlements for federal government DB plans, and 19% of benefit entitlements for private-sector DB plans.

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