Retirement Assets Total $15.6 Trillion in Third Quarter

Washington, DC, February 3, 2010 - Americans held $15.6 trillion in retirement assets at the end of the third quarter of 2009, accounting for 35 percent of all household financial assets in the United States, the Investment Company Institute reported today.

The finding is from “The U.S. Retirement Market, Third Quarter 2009.” The report covers assets held in private-sector defined benefit (DB) plans, government pension plans, defined contribution (DC) plans—including 401(k), 403(b), and 457 plans—annuities, and individual retirement accounts (IRAs). Between June 30, 2009, and September 30, 2009, retirement assets rose 7.9 percent, from $14.4 trillion to $15.6 trillion. During the third quarter, total return on equities was 15.6 percent, while bonds returned 3.6 percent, according to the Standard & Poor’s 500 stock index and the Citigroup Broad Investment Grade Bond Index.

At the end of the third quarter, IRAs held $4.1 trillion of retirement market assets; another $3.9 trillion was held in employer-sponsored DC plans, of which $2.7 trillion was held in 401(k) plans. Forty-six percent of IRA assets and 51 percent of DC plan assets were invested in mutual funds.

Lifecycle, or target date, mutual funds managed $233 billion at the end of the third quarter, compared with $194 billion at the end of the second quarter. More than 85 percent of assets in lifecycle mutual funds were held in retirement accounts.

Readers should refer to “The U.S. Retirement Market, 2008” for detailed information on the methodology, data sources, and interpretation of the Institute’s reports on retirement assets.