Number of 401(k) Millionaires Hits New Record, Fidelity Says (2024)

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Number of 401(k) Millionaires Hits New Record, Fidelity Says? ›

The number of 401(k) accounts with $1 million or more increased 31 percent, to 497,000 in the second quarter compared with the same period a year earlier, according to Fidelity Investments, one of the largest administrators of workplace retirement plans.

There were about 497,000 so-called 401(k) "millionaires" during the second quarter, the data shows. That marks a 2.5% increase from the previous quarter and is the third-straight quarter of retirement savings growth. Among those accounts, the average balance hit $1,595,200, up from $1,581,000 at the end of March.

There were about 497,000 so-called 401(k) “millionaires” last quarter, a 2.5 percent increase from 485,000 during the first quarter, according to Fidelity's analysis of 24 million 401(k) accounts across 26,000 employer-sponsored plans.

According to estimates based on the Federal Reserve Survey of Consumer Finances, a mere 3.2% of retirees have over $1 million in their retirement accounts. The number of those with $2 million or more is even smaller, falling somewhere between this 3.2% and the 0.1% who have $5 million or more saved.

The Reality of Million-Dollar Retirements

According to estimates based on the Federal Reserve Survey of Consumer Finances, only 3.2% of retirees have over $1 million in their retirement accounts. This percentage drops even further when considering those with $5 million or more, accounting for a mere 0.1% of retirees.

For example, if you have retirement savings of $1 million, the 4% rule says that you can safely withdraw $40,000 per year during the first year — increasing this number for inflation each subsequent year — without running out of money within the next 30 years.

Data from the Employee Benefit Research Institute, which utilizes the Federal Reserve's Survey of Consumer Finances, indicates that only about 0.1% of retirees have over $5 million saved for retirement. Additionally, about 3.2% have savings exceeding $1 million.

There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more.

Believe it or not, according to the 2022 Survey of Consumer Finances, only 9% of American households have saved half a million dollars or more for retirement. That's right, less than one in 10 families has reached this milestone.

What is the average balance at Fidelity? ›

Among the millions of retirement savers who hold accounts at Fidelity, the median 401(k) balance was $28,900 as of the first quarter of 2024, according to data the brokerage provided. That number may skew a little low, since many investors have multiple, small accounts from past employers.

It is 100% possible to retire with $400,000, provided you're not looking to enjoy a particularly expensive retirement lifestyle or hoping to leave the workforce notably early.

As can be expected, the millionaires are predominantly Gen X (individuals born between 1965 and 1980) and baby boomers (born between 1946 and 1964). The average age is just shy of 59 years old. As your earnings increase, contribute as much as you can.

As of June, there were roughly 497,000 so-called retirement-created millionaires in the U.S., according to the wealth management firm, which analyzed balances across 26,000 of its customers' accounts.

How Long Will Becoming a 401(k) Millionaire Take? If you invested $23,000 into your 401(k) each year and earned a consistent 8% return each year, you'd achieve a plan balance of $1 million in slightly under 20 years.

One issue is investors still don't contribute the maximum amount allowed. Only 14% of participants saved the statutory maximum amount of $22,500 per year ($30,000 for those age 50 or older). The likely reason: most felt they couldn't afford to.