U.S. Retirement Assets Rise 7.9% to $51.2T in Q2

U.S. retirement assets rose 7.9% in the second quarter to $51.2 trillion, with individual retirement accounts and employer-sponsored defined contribution plans posting stronger growth than government pensions, according to the Investment Company Institute. Retirement savings represented 33% of household financial assets at the end of June.

IRA assets increased 9.2% from March to $19.9 trillion, making them the largest segment of the retirement market. Defined contribution plans grew 8.7% to $15 trillion, including $10.8 trillion in 401(k) accounts, ICI reported. Together, IRAs and defined contribution plans held $34.9 trillion, accounting for more than two-thirds of retirement assets.

Government pensions, including federal, state and local plans, held $10.4 trillion, up 5.1% from the first quarter. Private-sector defined benefit plans accounted for $3.2 trillion, while annuity reserves outside retirement accounts totaled another $2.7 trillion.

Mutual funds remained a major component of account-based savings, managing $15.9 trillion, or 46%, of combined IRA and defined contribution assets. Their role was particularly pronounced in 401(k) plans, where they held $6.2 trillion, representing 58% of assets.

Equity mutual funds were the largest fund category within 401(k)s at $3.7 trillion. Hybrid funds, which include target-date funds, held $1.7 trillion.

Within IRAs, mutual funds accounted for $8 trillion, or 41% of assets. Equity funds held $4.8 trillion, followed by $1.3 trillion in hybrid funds.

Beyond 401(k)s, defined contribution savings included $1.6 trillion in 403(b) plans, $1.2 trillion in the federal Thrift Savings Plan, $920 billion in other private-sector plans and $585 billion in 457 plans.

ICI also revised historical IRA estimates downward beginning in the first quarter of 2023, incorporating newly available Internal Revenue Service data on account flows and year-end assets for 2022 and 2023.