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.
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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