2021 Was Another Banner Year for Retirement Savers

Employer-sponsored retirement plans and individual retirement accounts reached almost $40 trillion in total assets by the end of last year, even as a recovering economy faced some key pain points, according to new data released by the Investment Company Institute.

By DJ Shaw


New data from the Investment Company Institute shows that total U.S. retirement assets reached $39.4 trillion as of December 31, up 4.5% from September 2021 and up 11.6% from the $34.9 trillion reported for the end of 2020.

Retirement assets accounted for 33% of all household financial assets in the U.S. at the end of December 2021, the ICI reports. Individual retirement accounts totaled $13.9 trillion at the end of the fourth quarter, up 4.3% from the end of the third quarter of 2021.

Defined contribution plan assets were $11 trillion at the end of the fourth quarter, an increase of 5.3% from September 2021, according to ICI. Government pension plans—including federal, state and local government plans—held $8 trillion in assets December 2021, a 4.2% increase from the end of September 2021. Private-sector pension assets were $3.8 trillion at the end of the fourth quarter of 2021, and annuity reserves outside of retirement accounts accounted for another $2.6 trillion.

In a deeper look at the $11 trillion held in all employer-based defined contribution retirement plans as of December 2021, the ICI reports that $7.7 trillion was held in 401(k) plans. Some $685 billion was held in other private-sector DC-style plans, while $1.3 trillion was held in 403(b) plans, $445 billion in 457 plans and $835 billion in the Federal Employees Retirement System’s Thrift Savings Plan.

Mutual funds managed $5 trillion, or 64%, of the net assets held in 401(k) plans at the end of December 2021. With $3 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $1.4 trillion in hybrid funds, which include target-date funds, the ICI notes.

 Of IRAs’ $13.9 trillion in assets, according to the report, $6.2 trillion, or 45%, was invested in mutual funds. With $3.6 trillion, equity funds were the most common type of funds held in IRAs, followed by $1.2 trillion in hybrid funds.

According to the ICI data, target-date mutual fund assets totaled $1.8 trillion as of the end of December, up 3.8% from September 2021. Retirement accounts held the bulk (85%) of target-date mutual fund assets, with 66% held through DC plans and 19% held through IRAs.

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