Total U.S. retirement assets rose 1.3% from March, for a total of $40 trillion as of June 30, 2024, finds new Q2 2024 data from the Investment Company Institute (ICI).
According to the Quarterly Retirement Market Data, retirement assets accounted for 32% of all U.S. household financial assets by the end of June. Assets in individual retirement accounts (IRAs) came in at $14.5 trillion, whereas defined contribution (DC) plan assets hit $11.3 trillion at the end of Q2 2024, up 1.9% from March.
U.S. retirement assets have risen gradually since the last quarter of 2023, after experiencing a slight drop in its third quarter.
In a note, ICI Senior Economist Peter Brady said the steady growth is fueled by the success of IRAs and workplace defined contribution plans like 401(k)s. “IRAs and DC plans are powerful savings tools, providing millions of Americans access to diversified investment options and cost-effective products available through ‘dollar-cost-averaging’ investing,” Brady said.
Of the $11.3 trillion in DC plans, $8 trillion was held in 401(k) plans, $625 billion was held in other private-sector DC plans, $1.3 trillion in 403(b) plans, $465 billion in 457 plans, and $911 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Government defined benefit (DB) plans—including federal, state, and local government plans—had $8.5 trillion in assets as of the end of June 2024, a 0.5% increase from the end of March 2024. Private-sector DB plans held $3.2 trillion in assets at the end of the second quarter of 2024, and annuity reserves outside of retirement accounts accounted for another $2.4 trillion, according to the ICI.
Mutual funds achieved $5.2 trillion, or 65%, of assets held in 401(k) plans at the end of June 2024, and represented $12.8 trillion, or 49%, of total assets in IRAs and DC plans. Equity funds were the most common type of funds held in 401(k) plans at $3.1 trillion, followed by $1.4 trillion in hybrid funds, including target date funds (TDFs). On the IRA side, 43% of assets, or $6.4 trillion, were invested in mutual funds. Equity funds were the most common type of funds held in IRAs at $3.7 trillion, followed by $1.1 trillion in hybrid funds.
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