Total US retirement assets—which can also be thought of as part of the world’s outstanding financial liabilities—were $26.6 trillion as of June 30, 2017, up 1.9% from March 31, 2017. Retirement assets accounted for 34% of all household financial assets in the United States at the end of June 2017, according to the Investment Company Institute.
Much of this wealth is concentrated among a relative few. The wealthiest one percent of Americans owns 43% of U.S. financial assets, the top five percent (including the top one percent) own 73%, and the bottom 80% share only five percent of financial wealth, according to G. William Domhoff of the University of California at Santa Cruz.
Retirement assets generally rose in the second quarter of 2017.
- Assets in individual retirement accounts (IRAs) totaled $8.4 trillion at the end of the second quarter of 2017, an increase of 2.3% from the end of the first quarter.
- Defined contribution (DC) plan assets rose 2.2% in the second quarter of 2017 to $7.5 trillion.
- Government defined benefit (DB) plans (including federal, state, and local government plans) held $5.7 trillion in assets as of the end of June, a 1.5% increase from the end of March
- Private-sector DB plans held $3.0 trillion in assets at the end of the second quarter of 2017
- Annuity reserves outside of retirement accounts were $2.1 trillion
Defined contribution plans
Americans held $7.5 trillion in all employer-based DC retirement plans on June 30, 2017, of which $5.1 trillion was held in 401(k) plans. In addition to 401(k) plans, at the end of the second quarter, $575 billion was held in other private-sector DC plans, $949 billion in 403(b) plans, $297 billion in 457 plans, and $526 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
Mutual funds managed $3.3 trillion, or 65%, of assets held in 401(k) plans at the end of June 2017. With nearly $2.0 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $918 billion in hybrid funds, which include target date funds.
Individual Retirement Accounts
IRAs held $8.4 trillion in assets at the end of the second quarter of 2017. Forty-eight percent of IRA assets, or $4.0 trillion, was invested in mutual funds. With $2.2 trillion, equity funds were the most common type of funds held in IRAs, followed by $884 billion in hybrid funds.
Other developments
Target date mutual fund assets grew 4.8% in the second quarter, topping $1 trillion at the end of June 2017. Retirement accounts held the bulk of target date mutual fund assets. Eighty-seven% of these assets were held through DC plans (67%) and IRAs (20%).
© 2017 RIJ Publishing LLC. All rights reserved.
