Ownership of Retirement Accounts in 2022: Amounts in Defined Contribution Plans and Individual Retirement Accounts

Households rely on a variety of sources for income in retirement. In 2022, about 54% of U.S. households had savings in retirement accounts, which included certain employer-sponsored account-type pension plans, typically referred to as defined contribution (DC) plans, and individual retirement accounts (IRAs). Retirement accounts represent one of several possible income sources in retirement. Other sources of income in retirement—which are not included in the data in this report—include payments from Social Security, a federal social insurance program that provides monthly benefits to insured retired or disabled workers and their eligible family members, and payments from defined benefit (DB) plans, which typically provide workers with monthly benefits throughout retirement. In DC plans—a type of pension plan—workers are provided individual accounts funded by their own contributions, contributions from their employers, or both. DC plans do not provide guaranteed income. The funds in the account experience investment gains and losses, and the contributions and earnings, if any, are used as a source of income in retirement. IRAs are tax-advantaged accounts for individuals (or married couples) to save for retirement, typically outside of the workplace. Though individuals may contribute directly to IRAs, the majority of inflows to IRAs come from rollovers, which are transfers of savings from one retirement account, such as a 401(k) account, to another retirement account, such as an IRA. Most workers with DC plans roll over their savings to IRAs at job change or retirement. To provide a snapshot of households’ retirement savings based on different socioeconomic and demographic characteristics, CRS analyzed the 2022 Survey of Consumer Finances (SCF). This report provides data on household ownership and account balances of DC accounts, IRAs, and retirement accounts (DC accounts plus IRAs). As Congress considers various retirement-related bills, a greater understanding of how households save for retirement—either through DC plans, IRAs, or both—could help inform discussions. Analysis of the SCF showed that, among the 54.3% of households with retirement accounts, the median balance was $87,000, and the average balance was $334,097. Ownership rates and account balances varied based on household characteristics. For example, households with higher income, education, and net worth had greater DC plan, IRA, and retirement asset ownership rates and account balances compared to households with relatively lower income, education, and net worth.