IRAs continue to be big business, according to a recent report from research firm Cerulli Associates.
Total IRA assets rose to $13.9 trillion at the end of 2021, according to The Cerulli Report—U.S. Retirement Markets 2022: The Role of Workplace Retirement Plans in the War for Talent, making them still the largest segment of the retirement market.
IRA market share increased from 31% in 2011 to 38% in 2021, according to the researcher, which expects IRA market share to expand to 41% by 2027. Most of that asset growth comes from defined contribution plan rollovers, which sent $2.9 trillion into IRAs between 2016 and 2021.
“The exceptional capital market performance experienced during this five-year period translated to higher average 401(k) account balances and—for many higher balance participants nearing retirement higher rollover balances as well,” says Shawn O’Brien, associate director, in released comments.
Of course, a down year in 2022 will soften some of the growth in IRA assets, according to Cerulli, as well as lower the sum total of assets being rolled over from workplace retirement plans into IRAs, enabling 401(k)s and 403(b)s to enjoy higher net flows.