economy
IRAs hold trillions more than 401(k) plans
Investors are increasingly rolling money from 401(k) plans to IRAs. Some observers fear they're exposed to poor investment advice.
TL;DR
- IRA assets ($19.2 trillion) are nearly double those of 401(k) plans ($10.1 trillion) as of 2025.
- Annual rollovers from 401(k)-type plans to IRAs are projected to exceed $1 trillion by 2031.
- Direct IRA contributions are significantly lower than rollover amounts.
- Demographics, specifically the aging baby boomer generation, are a major factor in the increase of rollover assets.
- Psychological factors and the desire to consolidate accounts also contribute to rollover decisions.
- While rollovers can be beneficial, keeping some funds in a 401(k) may offer competitive investment prices and stronger legal protections due to fiduciary duties.
- Concerns exist that some financial salespeople may recommend rollovers when it's not in the investor's best interest.