Retirement account balances continued their post-pandemic
recovery in the first quarter, up 1.8% from December, and totaled $35.4
trillion. Retirement assets accounted for 32% of all household financial assets
in the United States, according to the Investment Company Institute.
Assets in individual retirement accounts (IRAs) totaled
$12.6 trillion, an increase of 2.8% from the end of the fourth quarter of 2020.
Government defined benefit (DB) plans—including federal,
state, and local government plans—held $7.1 trillion in assets, a 0.7%
increase. Private-sector DB plans held $3.4 trillion in assets, and annuity
reserves outside of retirement accounts accounted for another $2.5 trillion.
Defined contribution plans
Americans held $9.9 trillion in all employer-based DC
retirement plans as of March, up 2.1%, of which $6.9 trillion was held in 401k
plans. In addition to 401k plans, at the end of the first quarter, $610 billion
was held in other private-sector DC plans, $1.2 trillion in 403(b) plans, $391
billion in 457 plans, and $762 billion in the Federal Employees Retirement
System’s Thrift Savings Plan (TSP).
Mutual funds managed $4.6 trillion, or 66%, of assets held
in 401k plans at the end of March 2021. With $2.7 trillion, equity funds were
the most common type of funds held in 401k plans, followed by $1.3 trillion in
hybrid funds, which include target-date funds.
Individual retirement accounts
IRAs held $12.6 trillion in assets at the end of the first
quarter of 2021. Forty-five percent of IRA assets, or $5.6 trillion, were
invested in mutual funds. With $3.2 trillion, equity funds were the most common
type of funds held in IRAs, followed by $1.1 trillion in hybrid funds.
Other developments
As of March 31, target-date mutual fund assets totaled $1.7
trillion, up 4.7% from December 2020. Retirement accounts held the bulk (85%)
of target-date mutual fund assets, with 67 percent held through DC plans and 18
percent held through IRAs.
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