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.