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Retirement Savings, Household Assets Rise in 2013; Big Gains for Seniors

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Total household assets increased 16% last year, according to the 2014 “Portrait of U.S. Household Wealth: Market Sizing, Segmentation and Product Ownership” report by Hearts & Wallets. Seniors are feeling particularly wealthy, the report, released Wednesday, found.

Total investable assets topped $41 trillion at the end of 2013, according to the report, up from $35 trillion the prior year. The report noted that at least part of that is due to a change in the way pension benefits are accounted for. “Instead of funded benefit, promised benefit is now counted as household wealth, resulting in a more than $3 trillion wealth increase for government pensioners,” according to the report.

Even so, investors are saving more. Retirement savings account for one-third of all assets at almost $14 trillion. Those between ages 65 and 74 added over $1 trillion to their total retirement assets, the report found. Retirement assets for that age group reached $3.5 trillion by year-end 2013, up from $2.3 trillion.

Retirement savings for all age groups increased, outpacing even (albeit very slightly) total household assets at 17%. Hearts & Wallets noted that in 2013, retirement assets grew faster “than at any time since the Great Recession when retirement assets decreased from $10.5 trillion to $8.1 trillion.”

IRAs make up the lion’s share of retirement assets, according to the report, with $6.5 trillion invested in those accounts. Although they have more assets overall, IRAs grew at the same rate as private DC plans, increasing assets 20% since 2012.

“Rollovers out of employer plans into IRAs used to be the most important type of money movement in retirement assets, but now that the IRA category is so much bigger than DC, shifting IRAs from one firm to another is becoming more important,” Laura Varas, Hearts & Wallets partner and cofounder, said in a statement. “IRAs are highly mobile, and the ability to move them to access different services and products is a positive development for retail investors. The age of the consumer comes to retail investing, bringing with it a flurry of innovation that will improve lives.”

High-net-worth households, those with $5 million or more, control almost $14 trillion. The report found there are almost one million such households, and a third are newcomers to the HNW category. Most of those newcomers are in the 65- to 74-year-old age group.

Affluent households, those with more than $100,000 in investable assets, number 34 million, up from 31 million in 2012.

The report also looked at the shifting number of retirees as more boomers stop working and then go back to work. The number of pre-retiree household fell by 1 million, according to Hearts & Wallets. However, only 28% of respondents called themselves “post-retirees,” down from 36% in 2012.

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