$17.6 Trillion In Retirement Assets
Kurt Brouwer May 29th, 2008
Retirement assets owned by Americans had a very healthy gain of over $1 trillion in 2007. This report from the Investment Company Institute spells out the news [emphasis added]:
Americans’ Retirement Assets Grew 7% In 2007 (Investment Company Institute, May 8, 2008)
U.S. retirement assets topped $17.6 trillion in 2007, up 7 percent from 2006 (Figure 7.1). Retirement market assets are held in a variety of tax-advantaged plan types. The largest components are Individual Retirement Accounts (IRAs) and employer-sponsored defined contribution plans, holding $4.7 trillion and $4.5 trillion, respectively, at year-end 2007.
Figure 7.1 Source: Investment Company Institute
Other employer-sponsored pensions include private defined benefit pension funds (with $2.4 trillion in assets), state and local government employee retirement plans (with $3.2 trillion in assets), and federal government defined benefit plans and the federal employees’ Thrift Savings Plan (with $1.2 trillion in assets). In addition, there were $1.7 trillion in annuity reserves outside of retirement plans at year-end 2007.
Eighty-two million, or 71 percent of, U.S. households report they had employer-sponsored retirement plans, IRAs, or both in May 2007 (Figure 7.2). Sixty-one percent of U.S. households report that they had assets in defined contribution plan accounts, were receiving or expecting to receive benefits from defined benefit plans, or both. Forty percent of households report having assets in IRAs. Thirty percent of households had both IRAs and employer-sponsored retirement plans.
Figure 7.2 Source: Investment Company Institute
We hear a lot about the problems with funding Social Security and that is a legitimate issue. On the other hand, retirement plans outside of Social Security are doing very well indeed as we can see from these numbers.
See also last year’s report, $16.4 Trillion in Retirement Accounts.
And, assets in 401(k) plans should grow nicely in the future as well due to more favorable regulations (New 401(k) Plan Regulations Should Increase Retirement Assets).
- Geopolitics , Mutual Funds , Personal Finance , Retirement
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