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Total retirement assets near $25 trillion mark

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Total U.S. retirement assets hit $24.9 trillion by the end of March, up 1.3 percent from the end of last year, according to the most recent data from the Investment Company Institute.

All told, retirement assets account for 36 percent of household financial assets in the country.

Total assets are more than double what they were in 2000 and up from $18 trillion in 2007.

IRAs account for the greatest share of assets at $7.6 trillion, a significant recovery from the $3.7 trillion they held in 2008, in the wake of the financial crisis.

Defined contribution plans hold $6.8 trillion, $4.7 trillion of which were in 401(k) plans. Mutual funds managed $3.8 trillion, or 56 percent of those assets.

Mutual funds also managed about $3.6 trillion of IRA assets, or less than half the total accounts’ value. The proportion of total DC assets to IRA assets has held steady since 2012.

Target-date funds held $741 billion at the end of March, an increase of 5.4 percent from the first quarter; 88 percent of TDF assets are in defined contribution plans and IRAs.

As TDF assets march toward the $1 trillion threshold, the data shows their meteoric rise since the year 2000, when their total value was virtually imperceptible.

Almost $500 billion of TDF assets are held in defined contribution plans, up from $437 billion in 2013, and $128 billion in 2007, the first year after the enactment of the Pension Protection Act of 2006, which paved the way for TDFs as qualified default investments in defined contribution plans.

Private sector defined benefit plans held $3.2 trillion in assets, which is virtually unchanged since 2013.

In 2000, private company DB plans held $2 trillion, compared to the $3 trillion in defined contribution plans. That spread widened in the ensuing decade. By 2012 assets in defined contribution plans were double those in DB plans.

Government defined benefit plans held $5.1 trillion at the end of the last quarter, also virtually unchanged since 2013. In 2000, government sponsored pension benefits were on par with defined contribution assets. Defined contribution assets overtook government pension asset in 2012 and have steadily widened their spread since.