IRA assets swell as 401(k) rollovers drive retirement transfers
U.S. retirement savings are increasingly shifting from workplace plans into individual retirement accounts as more baby boomers reach retirement age. The flow is helping push IRA assets far above 401(k) balances, while also raising questions about whether retirees are moving money out of employer plans too quickly.
Highlights
- IRAs will hold about $19.2 trillion by end of 2025, compared to $10.1 trillion in 401(k) plans, per Investment Company Institute data.
- Cerulli Associates projects $941 billion in 401(k) rollovers into IRAs in 2026 and $1.3 trillion in 2031, driven by demographic trends.
- Experts warn rollover decisions are consequential due to fee and service differences, impacting hundreds of thousands of dollars for retiring households.
Rollover growth reshapes retirement assets
As reported by CNBC, rollovers from 401(k)-type plans rather than direct contributions account for much of the money held in IRAs. The pattern reflects how investors often move retirement assets at legally defined points such as job changes or retirement.IRAs hold about $19.2 trillion at the end of 2025, compared with $10.1 trillion in 401(k) plans, based on Investment Company Institute data. Even so, relatively few savers contribute directly to IRAs, and annual contribution limits remain lower than those for 401(k) plans.
Cerulli Associates estimates investors will roll over $941 billion into IRAs in 2026 and about $1.3 trillion in 2031. Demographics are a major driver, with more than 11,000 Americans a day turning 65, according to the Alliance for Lifetime Income.
Cost and advice risks for retirees
Keeping money in a company 401(k) after retirement can remain advantageous for many households, because employer plans often provide investment access and services at competitive prices relative to IRAs. Experts say rollover decisions can be among the most consequential financial choices households make, often involving hundreds of thousands of dollars or more.A rollover is not automatically the best option for every investor. Once savers move money from a 401(k) into an IRA, they generally cannot return those assets to the original workplace plan, though IRAs can still make more sense in some situations.
Our earlier report on demographic and affordability pressures in the U.S. auto market explained how slower population growth, changing consumer behavior, and high vehicle costs could reduce annual vehicle sales by more than 2 million units by 2040. We also noted that an aging buyer base and longer vehicle lifespans may intensify competition and consolidation among automakers as market turnover slows.
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