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Retirement Assets Rise 8% in 2012

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Retirement assets rebounded significantly at year-end 2012, reaching $19.5 trillion, a 44.4% jump from 2009 recession lows and an 8.3% rise from 2011, according to data released Wednesday by the Investment Company Institute.

According to an ICI report, The U.S. Retirement Market, Fourth Quarter 2012, retirement savings accounted for 36% of all household financial assets in the United States at the end of last year.

Assets in individual retirement accounts (IRAs) totaled $5.4 trillion at the end of 2012, an increase of 1.1% from the end of the third quarter, while defined contribution (DC) plan assets rose 0.9% in the fourth quarter to $5.1 trillion.

Combined, DC and IRA assets were up 10.5% for the year, 54.1% since the first quarter of 2009, and 14% since the third quarter of 2007.

The U.S. total retirement market in trillions of dollars. Source: ICI. Click to zoom.On Dec. 31, Americans held $5.1 trillion in all employer-based DC retirement plans, including $3.6 trillion in 401(k) plans, ICI reported. Those figures are up from $5 trillion and $3.5 trillion, respectively, as of Sept. 30.

Retirement assets by type. Click to zoom. (Source: ICI)Mutual funds managed $2.9 trillion of assets held in 401(k), 403(b), and other DC plans at the end of December, up from $2.8 trillion at the end of September, ICI reported. Mutual funds managed 57% of DC plan assets at the end of the fourth quarter.

IRAs held $5.4 trillion in assets at the end of the fourth quarter of 2012, up from $5.3 trillion at the end of the third quarter. Forty-six percent of IRA assets, or $2.5 trillion, was invested in mutual funds.

Target-date mutual fund assets totaled $481 billion as of year-end 2012, up 4.6% in the fourth quarter and up 27.9% for the year, ICI said. Retirement accounts held the bulk of target date mutual fund assets, with 91% of target date mutual fund assets being held through DC plans and IRAs.

In 2011, total U.S. retirement market assets were $18 trillion.