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Retirement savings skyrocket in '06

By Lisa Shidler

July 25, 2007 11:11 am ET

The nation’s retirement savings reached a record $16.4 trillion in 2006, an 11% increase from the prior year and a 55% increase since 2002, according to new analysis released today.

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The latest research published by Washington-based Investment Company Institute shows that the increase in retirement assets was fueled by strong growth in employer-sponsored defined contribution plans and individual retirement accounts.

Retirement assets now account for nearly 40% of household financial assets, up from 24% two decades ago, the research showed.

At year-end 2006, investors held $8.3 trillion in IRA and defined contribution plans such as 401(k) plans.

The remainder of the money was in annuities, government pension plans and private defined benefit plans.

“Americans continue to focus on saving for retirement and that is encouraging news,” said Sarah Holden, Senior Director of Retirement and Investor Research, in a statement. The report also showed that assets in lifestyle and lifecycle funds continued to grow rapidly.

These funds grew 50% in 2006 to $303 billion.

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