The U.S. retirement market is projected to grow to nearly $22 trillion by 2016. That represents a 38% increase from an estimated $16 trillion mark for the end of 2011, due mostly to continuing market recovery, according to data released Monday by Cerulli Associates, a Boston-based research firm.

IRAs are grabbing a growing share of total retirement assets, according to the statistics.  Cerulli notes that rollovers from defined contribution plans have fueled the growth of IRAs, which today represent 29.7% of the retirement market.  By 2016, IRA assets will account for 33%, according to Cerulli projections. 

Incentives to entice Baby Boomers to stay in defined contribution plans have been few and far between, which has led investors to roll “large balances into IRAs,” Alessandra Hobler, an analyst in Cerulli’s retirement practice said in a statement. Without action to prevent these distributions, rollovers will continue to fuel IRA assets, furthering their significant market share, beyond 2016, Cerulli said. 

Cerulli expects both public and private defined contribution retirement markets to grow as the “process of saving for retirement is continually simplified with features such as automatic enrollment, auto escalation, and simplified investment options such as target-date funds,” the firm said.

The findings are part of Cerulli’s ninth annual analysis of U.S retirement markets.

Margarida Correia writes for Bank Investment Consultant.



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