US Retirement Assets Climb to $45.8T in Q2

Total U.S. retirement assets rose to $45.8 trillion as of June 30, marking a 6% increase from the previous quarter, according to new data from the Investment Company Institute.

Retirement assets now account for 34% of all household financial assets in the country, according to the ICI report.

Growth Across Retirement Vehicles

Individual retirement accounts held the largest share of assets, totaling $18 trillion in assets, up 7% from March. Nearly 40% of IRA assets—$6.9 trillion—were invested in mutual funds, of which $4 trillion was invested in equities.

Defined contribution plans reached $13 trillion, rising 6.4% in the quarter. Of this, 401(k) plans represented the lion’s share at $9.3 trillion. Mutual funds managed 62% of 401(k) assets, with equity funds again dominant with $3.5 trillion invested.

Government defined benefit plans, including federal, state and local government pensions, held $9.3 trillion, a 4.9% increase.

Private sector DB pensions totaled $3 trillion, while annuity reserves outside retirement accounts accounted for another $2.5 trillion.

Retirement Entitlements and Liabilities

Total retirement entitlements stood at $49.9 trillion, including $45.8 trillion in financial assets, $185 billion in other assets and $3.9 trillion in unfunded liabilities. Unfunded obligations remain a concern, particularly for public sector DB plans:

• For state and local pension funds, unfunded liabilities equaled 30% of benefit entitlements;
• Federal pensions had unfunded obligations equal to 26% of entitlements; and
• Private sector pension funds had unfunded obligations equal to 5% of benefit entitlements.