Retirement Assets Slipped Slightly in Q1: ICI

Total U.S. retirement assets are down less than 1% from the fourth quarter of 2017 — reaching $28 trillion as of March 31, according to the Investment Company Institute.

Retirement assets accounted for 34% of all household financial assets in the United States at the end of March.

Defined Contribution Plans

Americans held $7.7 trillion in all employer-based defined contribution retirement plans at the end of the first quarter, which was down slightly (0.5%) from year-end 2017.

Of the employer-based DC retirement plans, $5.3 trillion was held in 401(k) plans. In addition, $535 billion was held in other private-sector DC plans, $988 billion in 403(b) plans, $318 billion in 457 plans, and $566 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).

Mutual funds managed $3.5 trillion — or 68% — of assets held in 401(k) plans at the end of March. With $2.1 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $978 billion in hybrid funds, which include target-date funds.

Defined Benefit Plans

Meanwhile, government defined benefit plans — including federal, state and local government plans — held $5.9 trillion in assets as of the end of the first quarter. This was a 1.6% decrease from the end of December 2017.

Private-sector DB plans held $3.1 trillion in assets at the end of the first quarter of 2018, and annuity reserves outside of retirement accounts accounted for another $2.2 trillion, according to ICI.

Individual Retirement Accounts

IRAs held $9.2 trillion in assets at the end of the first quarter of 2018, which is a decrease of 0.3% from the end of the fourth quarter of 2017.

Of that, 47% of IRA assets — or $4.3 trillion — was invested in mutual funds. According to ICI, equity funds were the most common type of funds held in IRAs with $2.4 trillion, followed by $928 billion in hybrid funds.

Target Date Funds

Target date mutual fund assets totaled $1.1 trillion, which is up 1.4% from the end of December. ICI reports that retirement accounts held the bulk of target date mutual fund assets. According to ICI, 87% of these assets were held through DC plans (67% of the total) and IRAs (20%).

— Check out Fidelity Cuts Target Date Fund Fees as Competition Heats Up on ThinkAdvisor.