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Retirement Assets Continue to Recover: ICI

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Investors took advantage of a growing economy and favorable market conditions to add almost a trillion dollars to retirement accounts in the first quarter.

The Investment Company Institute reports in its quarterly roundup that total U.S. retirement assets were $20.8 trillion as of March 31, up 4.6% from $19.9 trillion on Dec. 31. Retirement savings accounted for 36% of all household financial assets in the United States.

Assets in individual retirement accounts totaled $5.7 trillion, an increase of 5.1% from year-end 2012. Defined contribution plan assets rose 5.7% to $5.4 trillion.

Government pension plans—including federal, state and local government plans—held $5.2 trillion in assets as of the end of March, a 5.3% increase from the end of the fourth quarter of 2012. Private-sector defined benefit (DB) plans held $2.7 trillion in assets at the end of the first quarter, and annuity reserves outside of retirement accounts accounted for another $1.9 trillion.

Defined Contribution Plans

Americans held $5.4 trillion in all employer-based DC retirement plans on March 31, of which $3.8 trillion was held in 401(k) plans. Those figures are up from $5.1 trillion and $3.6 trillion, respectively, as of December 31. Mutual funds managed $3.1 trillion of assets held in 401(k), 403(b), and other DC plans at the end of March, up from $2.9 trillion at year-end 2012. Mutual funds managed 57% of DC plan assets at the end of the first quarter.

Individual Retirement Accounts

IRAs held $5.7 trillion in assets, up from $5.4 trillion at the end of 2012. Forty-six percent of IRA assets, or $2.6 trillion, was invested in mutual funds.

Other Developments

Target date mutual fund assets totaled $529 billion, an increase of 10% in the first quarter. Retirement accounts held the bulk of target date mutual fund assets: 91% of target date mutual fund assets were held through DC plans and IRAs.

Check out Median Retirement Balance Is $3,000 for All Working-Age Households on AdvisorOne.