Skip to main content

Long-term value creation in US retirement

Current trends in the US retirement market—the world’s largest—will have a disproportionate impact on leading financial services firms over the next two decades.

Retirement is and will continue to be one of the largest growth opportunities for wealth managers, insurers, and asset managers. Not surprisingly, leading firms from across the financial-services industry are tapping into this long-term growth opportunity.

The largest retirement market is in the United States, where $26 trillion in assets are held in retirement-related accounts, including public and private defined-contribution and defined-benefit plans, individual retirement accounts (IRAs), and annuities. These accounts collectively support more than $430 billion in revenue for retirement recordkeepers, asset managers, wealth managers, annuity writers, and life insurers. Contrary to popular belief, this asset pool will not diminish as baby boomers complete their retirement journey. This is a long-term trend that will continue to play out. By 2026, three-quarters of household financial assets will be held by individuals aged 55 and over, up from two-thirds today.

How the economics unfold in retirement markets will continue to have a disproportionate impact on leading financial-services firms over the next two decades. In this article, we share perspectives on potential industry trajectories and options for incumbents to improve competitiveness in a changing environment.

About the author(s)

Alex D’Amico and Jonathan Godsall are partners in McKinsey’s New York office, and Jimmy Zhao is an associate partner in the Boston office.

Related Articles