The Federal Reserve's Financial Accounts of the United States reported that the total amount of U.S. retirement assets (outside of Social Security) was $37.8 trillion at the end of 2022.¹ Figure 1 shows (1) the amount of financial assets (in trillions of dollars) in pension plans sponsored by private sector employers, state and local governments, and the federal government; (2) the amount of assets in Individual Retirement Accounts (IRAs); and (3) the components of these assets. Table 1 provides more detail on the components of U.S. retirement financial assets in dollar terms. Table 2 provides historical data on inflation-adjusted end-of-year asset levels from 2013 to 2022.

Figure 1. Total Holdings and Components of Financial Assets in U.S. Pension Plans and Individual Retirement Accounts (IRAs) In Trillions of Dollars, as of December 31, 2022

Source: Figure constructed by CRS from Board of Governors of the Federal Reserve System, Financial Accounts of the United States, https://www.federalreserve.gov/apps/fof/FOFTables.aspx. See tables L.118.b, L.118.c, L.119.b, L.119.c, L.120.b, L.120.c, and L.229. Notes: IRAs include employer-sponsored IRAs and state-administered IRA programs. Mutual funds invest in a variety of assets, including corporate equities and debt. As a result, the total amount of corporate equities and debt held by pension plans likely exceeds the values presented in the Corporate Equities and Debt categories in the figure.

Figure 1 shows six categories of retirement financial assets as classified by CRS: short-term securities, debt, corporate equities, mutual funds, defined benefit (DB) plans claims on sponsors, and other financial assets. Short-term securities include checkable deposits, savings deposits, money market funds, and security repurchase agreements. Debt is composed of securities such as commercial paper, U.S. Treasury securities, U.S. government agency and government-sponsored-enterprise-backed securities, foreign bonds, and corporate bonds. Corporate equities include publicly traded shares and private equity. Mutual funds pool money from investors and invest the money in securities such as stocks, bonds, and debt. DB claims on sponsors are funds owed but unpaid by plan sponsors to the plan. Unpaid funds are treated as financial assets. Other financial assets include, but are not exclusively composed of, insurance contracts and contributions receivable.

Many employers in both the private and public sectors offer one of two types of pension plans: DB plans or defined contribution (DC) plans. Some employers offer both types. Individuals can also save for retirement outside of the workplace with IRAs.

In DB plans, participants usually receive monthly payments in retirement based on a formula that typically uses either (1) a combination of length of service, accrual rate, and average of final years' salary or (2) a flat dollar amount times the number of months or years in the plan.

In DC plans—such as 401(k) plans, 403(b) plans, 457(b) plans, and the federal government's Thrift Savings Plan (TSP)—workers and/or employers contribute a portion of their wages (up to an annual dollar limit that is adjusted annually for changes in the cost of living) to individual accounts established by the employers.² Employer contributions may be a match, which is equal to some or all of the worker's contribution, or a contribution made regardless of the employee's contribution. The account may accrue investment returns and can be used as a source of income in retirement.

An IRA is a privately held retirement savings account funded by individual contributions from wage income and rollovers (i.e., transfers) of DC plan savings at job change or retirement and lump sums from DB plans, typically at retirement. Most assets in IRAs are from rollovers.

About two-thirds of U.S. households had a financial stake in the U.S. retirement system in 2019 (outside of Social Security, which covers most households). An analysis of the 2019 Federal Reserve's Survey of Consumer Finances (SCF) found that among all U.S. households (which includes working and retired households) in 2019

• 63.3% had DC assets, participated in DB plans, or had IRA assets;
• 37.5% had DC assets;
• 30.2% participated in DB plans; and
• 25.4% had IRA assets.³

Historical Retirement Asset Data

Table 2 reports the inflation-adjusted amounts in (non–Social Security) retirement assets from 2013 to 2022. The total amount of financial assets increased by 13.3% in inflation-adjusted terms from $33.4 billion in 2013 to $37.8 billion in 2022. Federal DC assets, IRAs, and private DC assets showed the largest real increases (43.4%, 32.2%, and 27.7%, respectively). The increase in assets is likely from both investment returns and increases in the number of participants. For example, the S&P 500 was 108.7% higher at the end of 2022 compared to at the end of 2013.⁴ The number of participants in private sector DC plans was 8.1% higher in 2020 (the most recent year for which data are available) compared to 2013,⁵ and the number of taxpayers with IRAs was 18.8% higher in 2019 (the most recent year for which data are available) compared to 2013.⁶