Americans have shifted a vast amount of retirement savings into individual retirement accounts, a shift that matters now because it concentrates control — and potential vulnerability — of retirement assets outside employer plans at a time when investor protections have weakened. IRAs held roughly $19.2 trillion at the end of 2025, compared with about $10.1 trillion in 401(k) plans, creating new stakes for savers deciding whether to move money when they change jobs or retire.
Most IRA balances aren’t built from fresh contributions. Instead, they have grown largely through transfers from workplace plans — called rollovers — made when people leave an employer or start drawing retirement income. IRS figures show nearly 6 million people moved money into IRAs in 2023, sending about $682 billion into these accounts that year, while direct IRA contributions totaled only about $89 billion.
Why rollovers have become the dominant source of IRA assets
Demographics are the central driver. Baby boomers are reaching traditional retirement age in large numbers — industry data put the pace at more than 11,000 turning 65 each day — and many choose to transfer retirement account balances into IRAs when they leave the workforce.
There are psychological and practical reasons behind that choice. Some retirees prefer to consolidate multiple employer plans into a single account to simplify record-keeping and distributions. Others feel uncomfortable leaving savings tied to a former employer’s plan even if the plan remains an option.
Market forces have amplified the trend. Research firm Cerulli found that from 2020 to 2025 traditional, pretax IRAs added roughly $5.2 trillion in assets; rollovers accounted for about $3.8 trillion of that gain while new contributions were a small fraction, near $119 billion. Market appreciation and withdrawals also played large roles in the net change.
Regulatory change and what it means for savers
The legal environment around rollover advice has shifted recently. A federal court decision ended enforcement of a Biden-era rule meant to raise standards for some advisers and insurance agents who encourage rollovers, and the subsequent administration chose not to defend that rule in court. That reduces the regulatory guardrails that aimed to limit conflicted or aggressive sales tactics around rollovers.
Industry forecasts expect rollover flows to keep growing: Cerulli projects about $941 billion in rollovers to IRAs in 2026 and roughly $1.3 trillion by 2031. For savers, that means more dollars will move into individual accounts at a time when the duties and oversight governing advice can vary widely.
What to consider before you move money
Financial professionals say rollover decisions should be made case by case. Moving assets can be sensible in some situations, but it can also close the door on protections and features available inside employer-sponsored plans.
- Fees and investment options: Many 401(k) plans offer institutional-priced funds and lower-cost services that can make staying put attractive for large balances.
- Fiduciary protections: Employer plans are governed by a legal duty that requires plan managers to act in participants’ best interests; comparable protections don’t always apply outside the plan.
- Access and flexibility: IRAs often provide a wider selection of investments and more flexible withdrawal rules, which may suit savers who need ad-hoc distributions.
- Irreversibility: Once funds are moved from many employer plans into an IRA, it may not be possible to recontribute them to the plan later.
Advisors caution that rollover conversations are a frequent sales opportunity for some financial representatives — not all of whom have the same legal exposure or incentives. As a result, it’s important for savers to verify whether advice is fiduciary in nature and to compare costs and services before agreeing to a transfer.
For many households the amounts at stake are substantial. Consulted experts note rollover choices often involve hundreds of thousands of dollars and can have long-term consequences for retirement income planning and fees.
Bottom line: no single answer fits everyone
IRAs now hold more retirement assets than 401(k)s because rollovers have become the default path for people leaving employer plans. That pattern will likely continue as large cohorts age and move into retirement — and as the regulatory framework around rollover advice remains unsettled. Savers should weigh costs, protections and distribution needs carefully and treat rollover decisions as major financial choices rather than routine paperwork.
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Jordan Keller specializes in analyzing the US financial markets. With concrete recommendations, he helps you secure and boost your investments by providing strategies that adapt to market fluctuations.