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Two- Thirds of U.S. Households Have a Financial Stake in the Retirement System

401(k) Plans Financial Planning State Mandates

Key Takeaways

  • Even using inflation-adjusted figures, retirement assets increased 13.3% in the last decade.
  • The overall growth is likely due to the implementation of state-sponsored Auto-IRA programs, that also spurred a slew of new private employer-sponsored retirement plans.

A new perspective from 401(k) Specialist Magazine when assessing the current retirement market, a two-thirds majority of Americans have "dogs in the fight."

"According to the Congressional Research Service (CRS), about two-thirds of U.S. households had a financial stake in the U.S. retirement system in 2019 (outside of Social Security)."

When looking at the entirety of the retirement industry, the CRS made sure to split the data into two subcategories: employer sponsored retirement plans and individual retirement accounts. The research found that, "from 2013 to 2022, the CRS reported that total real retirement assets—inflation-adjusted— increased by 13.3%, or $4.4 trillion, and peaked at $44.3 trillion in 2021." Even noting that the majority of the overall growth percentage was due to a spike in Individual Retirement Accounts (IRAs), in line with the onset of most of the state-sponsored retirement programs. It is safe to assume the growth factor was indeed induced alongside state government influence.

Employer-sponsored retirement plans held total assets at $26.3 trillion, while individua retirement accounts (IRAs) held approximately $11.5 billion in assets. More specifically, state-sponsored IRA programs crossed the $1B threshold at the end of July this year- still trailing behind employer-sponsored retirement plans in retirement-readiness efficacy, but nonetheless having a positive affect on the private market.

The most recent data from Georgetown University's Center For Retirement Initiatives found that the rate of exempted employers (employers that have opted out of the state's program to sponsor their own private retirement plan) increased by 4.5% in the last month. To read the full report tracking the 6 fully implemented programs:

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