Retirement savings grow 7%

The retirement assets of Americans grew 7% to $17.6 trillion last year, with the strongest growth coming from worker contributions to 401(k) accounts and other company-sponsored plans and to individual retirement accounts.

The Investment Company Institute, a trade association, said Americans held $4.5 trillion in defined-contribution plans such as 401(k)s at year’s end and $4.7 trillion in IRAs. The balance was $8.4 trillion in traditional pension plans, government employee plans and annuities, the institute said.

In 2006, retirement assets grew 11% to $16.5 trillion. Of the total, $4.1 trillion was in defined-contribution plans and $4.2 trillion in IRAs.

Brian Reid, the institute’s chief economist, said last year’s slower growth mainly reflected weaker markets. The Standard & Poor’s 500 index advanced just 3.5% last year compared with 16% the previous year.

Reid said he was impressed that the $1.1-trillion growth in retirement assets last year represented about half of the total growth in household wealth in the year, according to Federal Reserve figures.