U.S. Retirement Market Nears $50 Trillion Milestone
Total US retirement assets grew by 11.2% in 2025, and finished the year at $49.1 trillion (up 2.1% from $48.1 trillion at the end of Q3 2025) according to new data released Friday by The Investment Company Institute.
ICI’s report, “The US Retirement Market, Fourth Quarter 2025,” found retirement assets accounted for 34% of all household financial assets in the United States at the end of December 2025.
Billions of dollars, end-of-period, selected periods
Note: Components may not add to the total because of rounding.
Sources: Investment Company Institute and Department of Labor
All employer-based defined contribution (DC) plan assets totaled $14.2 trillion at the end of the fourth quarter, up 1.7% from September 30, 2025. 401(k) plans held $10.1 trillion of that total. In addition to 401(k) plans, at the end of the fourth quarter, $880 billion was held in other private-sector DC plans, $1.5 trillion in 403(b) plans, $550 billion in 457 plans, and $1.1 trillion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $5.8 trillion, or 57% of assets held in 401(k) plans at the end of December 2025. With $3.4 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $1.6 trillion in hybrid funds, which include target date funds.
ICI’s report also found mutual funds play a key role in US households’ individual account-based retirement savings but are less important for traditional DB plans. Mutual funds represent $14.7 trillion, or 44% of the assets held in IRAs and DC plans in December 2025.
Mutual funds are also held through variable annuities (VAs), which have similar tax advantages and restrictions as retirement plans and are counted as part of Americans’ nest egg for retirement. In December 2025, VA mutual fund assets outside retirement plans amounted to $1.4 trillion.
Earlier this week, LIMRA reported that traditional variable annuity sales were $17.7 billion in the fourth quarter, up 11% from fourth quarter 2024. For the year, traditional VA sales rose 8% year over year to $63.1 billion. Total U.S. annuity sales increased 7% to $464.1 billion in 2025. Fourth quarter sales jumped 14% to $117.2 billion, representing the ninth consecutive quarter of $100+ billion in sales.
IRAs approach $20 trillion
Sources: Investment Company Institute, Federal Reserve Board, American Council of Life Insurers, and Internal Revenue Service Statistics of Income Division
Per today’s ICI report, assets in individual retirement accounts (IRAs) totaled $19.2 trillion at the end of the fourth quarter of 2025, an increase of 1.7% from the end of the third quarter of 2025.
Thirty-nine percent of IRA assets, or $7.4 trillion, was invested in mutual funds. With $4.3 trillion, equity funds were the most common type of funds held in IRAs, followed by $1.2 trillion in hybrid funds.
Defined benefit plans
Government defined benefit (DB) plans—including federal, state, and local government plans—held $10.0 trillion in assets as of the end of December 2025, a 4.5% increase from the end of September 2025. Private-sector DB plans held $3.1 trillion in assets at the end of the fourth quarter of 2025, and annuity reserves outside of retirement accounts accounted for another $2.6 trillion.
The quarterly retirement data tables are available at “The US Retirement Market, Fourth Quarter 2025.”
SEE ALSO:
• Target Date Fund Assets Surge to $4.8T as CITs Gain Market Share
• Employers Account for More than One-Third of 401(k) Contributions
• IRAs, 401(k)s, Drive Growth in U.S. Retirement Assets
• New 401k Averages Book Finds Plan Fees Still Falling, Cost Disparities Persist
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.