Retirement assets, accounting for 36% of all household financial assets in the U.S., rose by 2.8% in the second quarter.
According to the Investment Company Institute, retirement assets rose from $23.4 trillion at the end of March to total $24 trillion as of June 30.
Of that, defined contribution plans saw the largest increase, rising 3.6% to $6.6 trillion. IRAs came next, rising 3.3% to reach $7.2 trillion, with government defined benefit plans coming in a distant third — growing 1.4% — to total $5.1 trillion.
Private-sector DB plans accounted for another $3.2 trillion in assets, while annuity reserves outside of retirement accounts totaled $2 trillion.
Among DC plans, 401(k)s made up the bulk of the holdings, at $4.4 trillion — up from $4.3 trillion at the end of March. Other DC holdings broke down as follows: $555 billion in other private-sector DC plans, $941 billion in 403(b) plans, $255 billion in 457 plans, and $401 billion in the Federal Employees Retirement System’s Thrift Savings Plan.
The majority of assets in DC plans as of the end of the second quarter were held in mutual funds, which managed 56% ($3.7 trillion). Mutual funds also accounted for 44% of IRA assets, $3.1 trillion.
This quarter’s report saw a change from earlier reports in that it included data on total retirement entitlements — both retirement assets and unfunded liabilities of DB plans.
ICI said that as of the end of the quarter, U.S. total retirement entitlements were $27.1 trillion, which includes not only $24 trillion of retirement assets but also $3.1 trillion of unfunded liabilities. With those unfunded liabilities included in the total, it said, retirement entitlements accounted for 40% of the financial assets of all U.S. households at the end of June.
Breaking it down by sector, 1% of private-sector DB plan entitlements were unfunded liabilities; 25% of state and local government DB plan entitlements were unfunded; and 58% of federal DB plan entitlements were unfunded.
Check out Health Trumps Financial Security for Retirees on ThinkAdvisor.