U.S. Retirement Assets Reach $24.7T

The amount of money socked away in retirement accounts jumped up 6% from year-end 2013 to the end of 2014, according to research by the Investment Company Institute.

U.S. retirement assets totaled $24.7 trillion at the end of December 2014, compared to $23.3 trillion at the end of 2013, the research found.

“Retirement assets accounted for 36% of all household financial assets in the United States at the end of the fourth quarter of 2014,” according to the ICI. The majority of the money is saved in individual retirement accounts and workplace retirement plans, both defined benefit and defined contribution.

There was $7.4 trillion in individual retirement accounts at the end of 2014, a slight increase of 1.4% from the end of the third quarter. “Forty-eight percent of IRA assets, or $3.5 trillion, was invested in mutual funds,” the ICI found.

DC plan assets rose 2.1% in the fourth quarter to $6.8 trillion, the report found. Of that amount, 401(k) plans accounted for $4.6 trillion in assets; private-sector DC plans accounted for $560 billion; there was $951 billion in 403(b) plans; $261 billion in 457 plans; and $427 billion in the Federal Employees Retirement System’s Thrift Savings Plan, according to data researched by the ICI. “Mutual funds managed $3.7 trillion, or 55%, of assets held in DC plans at the end of December,” the report notes.

There was $5.2 trillion stored in government defined benefit plans, including federal, state and local government plans. Private DB plans held $3.2 trillion at the end of 2014 and annuity reserves outside of retirement accounts accounted for another $2 trillion, according to the ICI.

The ICI also looked at retirement entitlements, which include retirement assets and the unfunded liabilities of defined benefit plans.

“As of Dec. 31, 2014, U.S. total retirement entitlements were $27.8 trillion, including $24.7 trillion of retirement assets and another $3.1 trillion of unfunded liabilities. Including both retirement assets and unfunded liabilities, retirement entitlements accounted for 41% of the financial assets of all U.S. households at the end of December,” the ICI determined.

“Unfunded liabilities are a larger issue for government DB plans than for private-sector plans,” the ICI found. At the end of 2014, unfunded liabilities were 1% of private-sector DB plan entitlements, 25% of state and local government DB plan entitlements and 56% of federal DB plan entitlements.

Information in this report was compiled from the Investment Company Institute, Federal Reserve Board, National Association of Government Defined Contribution Administrators, American Council of Life Insurers, and Internal Revenue Service Statistics of Income Division.