Retirement assets in the U.S. jumped to nearly $25 trillion in the first quarter of 2015, a 1.3% jump from $24.6 trillion at the end of the year.
Retirement plan assets have more than doubled since 2000, when assets were $11.6 trillion, according to research by the Investment Company Institute. Assets had climbed to $18 trillion in 2007, before the market crash sent assets back down to $14.2 trillion. The industry has experienced steady increases since then.
In its most recent research, the ICI found that retirement assets accounted for 36% of all household financial assets in the U.S. at the end of the first quarter of 2015. Assets in individual retirement accounts increased 2.1% from the fourth quarter to $7.6 trillion. Of that amount, 48% of IRA assets, or $3.6 trillion, was invested in mutual funds, the ICI said.
Also in the first quarter, defined contribution plan assets rose 1.8% to $6.8 trillion.
Of that $6.8 trillion, $4.7 trillion was held in company-sponsored 401(k) plans; $570 billion was held in other private-sector defined contribution plans; $875 billion in 403(b) plans; $265 billion in 457 plans; and $437 billion in the Federal Employees Retirement Systems Thrift Savings Plan, according to the ICI. Mutual funds accounted for $3.8 trillion, or 56%, of assets held in DC plans at the end of March.
Government defined benefit plan assets, meanwhile, decreased by 0.5% from the end of December, ending the quarter at $5.1 trillion in assets. Private-sector defined benefit plans held $3.2 trillion at the end of March and an additional $2.1 trillion was held in annuity reserves outside of retirement accounts, according to the ICI.
Target-date funds have grown in popularity the past few years as the qualified default investment alternative for many retirement plans. As of March 31, target-date mutual fund assets totaled $741 billion, a 5.4% increase from the end of 2014. The ICI found that 88% of target-date fund assets were held in defined contribution or individual retirement accounts. In 2007, there was only $183 billion invested in target-date mutual funds.
Paula Aven Gladych is a freelance writer based in Denver.
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