	Introduction

Americans financially prepare for retirement in a variety of ways: most individuals who work are eligible for Social Security benefits; about half the workforce is covered by an employer-sponsored pension; some save for retirement using Individual Retirement Accounts (IRAs); others accumulate non-retirement financial assets, such as stocks, bonds, and mutual funds; and some accumulate non-financial assets, such as homes or other real estate or business ownerships. Employers who offer pension plans for their workers sponsor one or both types: defined benefit (DB) pension plans or defined contribution (DC) pension plans. Congress has expressed support for the goal of increasing U.S. household retirement income security. The nature of employer-sponsored pensions has changed over the past 30 years. Because of this shift, an increasing number of households have greater responsibility for their economic well-being in retirement. Types of Retirement Plans and Accounts

Congress has authorized a variety of tax incentives to encourage employers and workers to save for retirement. Data in this report are from the 2010 SCF, which is a triennial household survey conducted by the Federal Reserve. Within each age group, median net worth was higher for married households than for single households. Possible explanations for the low percentage among households in which the head is older than 74 years include (1) these households are most likely to be retired and thus have been drawing down their retirement assets and (2) these households are more likely to have a DB pension plan, which is a source of income in retirement but is not measured by the SCF. Table 1 and Table 2 also show that there was a large increase in the median and average amounts of non-retirement financial assets for single households in which the age of the head of household is 75 or older compared with single households in which the age of the householder is 65 to 74. For all single and married households, the average amount of non-retirement financial assets was larger than the amount of retirement assets. Younger households are less likely than older households to be covered by DB pension plans and so may need to prepare for retirement differently than previous generations. Households in which neither the head of the household nor the spouse were in the labor force would likely not have made a contribution to a retirement account in 2010 because (1) they would not have been working for an employer that offered a defined contribution retirement plan and (2) they would not have had income from wages from which to make a contribution to an IRA. Section 415(b)(1)(A), the maximum benefit allowed from a DB plan is $205,000 in 2013. The proposed FY2014 budget estimates that the amount of DC plan assets needed to fund an annuity equal to $205,000 would be approximately $3.4 million. Less than 1.0% of U.S. households had IRA or DC assets of $1.0 million or more. Except for households in which the head of the household was aged 75 or older, the percentage of housing as a percentage of total assets generally declined as the age of the head of the household increased. Although this report does not address whether households have sufficient resources from which to ensure an adequate standard of living in retirement, the data in this report highlight the importance of understanding the context in which decisions about saving for retirement occur. Some of the factors that might affect the accumulation of retirement assets include demographic characteristics of the household (e.g., age of the head of the household, marital status, number of children, if any); the financial situation of the household (e.g., ownership of other assets and the amount and type of household debt); and the employment situation of the household (e.g., whether employed, the worker's participation in other retirement plans, and the amount of Social Security benefits the household expects to receive). Figure 3 indicates that in 2010 households in which the head was younger than 55 years old were more likely to have a DC plan than an IRA or a DB plan. Retirement income adequacy is an important concern for both working and non-working households.
Whether households have sufficient savings from which to ensure adequate income throughout retirement is a concern of households and, therefore, policymakers. The retirement income landscape has been changing over the past few decades. Although most households are eligible to receive Social Security benefits in retirement, over the past 30 years, the types of non-Social Security sources of retirement income have been changing. About half of the U.S. workforce is covered by an employer-sponsored pension plan. An increasing number of employers offer defined contributions (DC) pension plans (i.e., tax-advantaged accounts in which employee, and sometimes employer, contributions accrue investment returns) in lieu of traditional defined benefit (DB) pension plans (i.e., monthly payments to a retiree by a former employer). This shift in the nature of employer-sponsored pensions places more responsibility on workers to financially prepare for their own retirement. Households also save for retirement using Individual Retirement Accounts (IRAs), into which contributions, up to a specified limit, are tax-deductible for some individuals.
Congress has several reasons for its interest in the retirement preparedness of American households: income from Social Security may be insufficient to provide for an adequate standard of living in retirement for U.S. households; congressional actions may encourage or discourage employer and household efforts to provide for their own well-being in retirement; and the U.S. Treasury will forego $117 billion in FY2013 as a result of tax policies that are designed to encourage employer and worker retirement savings. President Obama's FY2014 budget would prohibit contributions to DC pension plans and IRAs that have a value over $3.4 million. This threshold is specified to be equivalent to the maximum annual payment allowed from a DB pension plan, which is $205,000 in 2013.
This report provides data on a variety of household wealth measures in 2010 from the Federal Reserve's triennial Survey of Consumer Finances. Although the amount of retirement assets is the primary focus of the report, other measures of wealth (such as the amount of total assets, financial assets, total debt, net worth, and housing equity) are also included. The report classifies the amount of assets and debt by the age of the head of the household for both single and married households. In general, the amount of household wealth is higher for married households than for single households. Household wealth generally increased as the age of the head of the household increased, although some measures decreased for those households in which the head of the household was aged 75 or older. In general, the median values were less than the average values, which is an indication that some households held relatively large amounts of wealth compared with most households.
Among households with retirement assets, households in which the head is younger than 55 years old are more likely to own DC pension plan assets than they are likely to own assets from IRAs, whereas households in which the head is aged 55 or older are more likely to have IRA assets. In 2010, less than 1.0% of U.S. households had IRA or DC assets of $1.0 million or more.
Ownership of a principal residence is likely to be a factor that affects the accumulation of retirement assets. Survey data suggest an important saving goal for younger households is home ownership, whereas preparing for retirement is an important saving goal for older households. As the age of the head of the household increases, the percentage of assets represented by the household's principal residence decreases, although there is not a discernible pattern to the percentage of wealth that retirement assets represent.