(Bloomberg) -- The amount of 401(k) millionaires is within striking distance of an all-time high.
The number of seven-figure 401(k) accounts at Fidelity Investments jumped 20% in 2023’s final quarterto 422,000, marking a sharp recovery from the previous quarter’s 7.7% drop, ananalysis releasedby Fidelity on Tuesday shows.
Related: 401(k) Real Talk Episode 95: February 28, 2024
Gains in the stock market helped swell retirement balances last year as the S&P 500 advanced 24% following 2022’s 19% decline.The impressive run was powered in large part by the so-called “Magnificent 7” stocks that now make uproughly 30%of the market-cap weighted S&P 500 Index. In 2023, Nvidia Corp. gained more than 238%, Meta Platforms Inc. rose more than 194% and Amazon.com Inc. was up more than 80%.
The only timewhen the ranks of 401(k) millionaires at Fidelity was higher was in 2021’s fourth quarter, when there were 442,000 such accounts. Elsewhere, the number of seven-figure IRAs is at a record391,600 accounts.
Related: 401(k)s Will Be Gone Within a Decade
The average age of 401(k) millionaires at Fidelity skews older at around 59. However,Gen Xersalso hit a nice milestonein the last few months of 2023. Those who have had the same401(k) plan for 15 straight years saw average balances hit $501,000. That said, the average overall retirement balance at Fidelity is far from the millionaire mark, at$118,600.
Other highlights from the report:
- The total savings rate —adding up workers’contributions and their employers’ matching contributions —was 13.9%, in line with the previous two quarters.
- For all of 2023, over 37% of workers with 401(k)s raised the percentage of pre-tax salary they directinto their plan.In just the fourth quarter, 10% of employees raised the percentage.
- Some 78% of 401(k) savers contributedenough to their plan to get their employer’s full matching contribution.
- Roth IRA accounts held by Gen Z savers rose 50% in 2023’s fourth quarter compared with the same period in 2022.
To contact the author of this story:
Suzanne WoolleyinNew Yorkat[emailprotected]
FAQs
Nearly half a million workers—485,000—hold a seven-figure balance in their accounts, according to Fidelity Investments' first-quarter 2024 retirement analysis.
How many people have 1 million in 401k? ›
(TND) — A record number of people have reached $1 million in their 401(k) retirement accounts, according to Fidelity Investments. A Fidelity spokesperson Tuesday said they counted 485,000 such accounts as of the first quarter of the year, up 15% from the previous quarter and up 43% from a year ago.
How are 401ks doing today with 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.
How many people actually max out their 401k? ›
Few investors max out their 401(k) contributions
In 2022, 15% of retirement plan participants saved the highest amount of $20,500 for that year, or $27,000 for those age 50 and older, according to Vanguard research.
What is the average 401k balance at age 65? ›
Average and median 401(k) balances by age
| Age range | Average balance | Median balance |
|---|
| 35-44 | $76,354 | $28,318 |
| 45-54 | $142,069 | $48,301 |
| 55-64 | $207,874 | $71,168 |
| 65+ | $232,710 | $70,620 |
2 more rowsMar 13, 2024
How much do people save for retirement? In 2022, about 46% of households reported any savings in retirement accounts. Twenty-six percent had saved more than $100,000, and 9% had more than $500,000. These percentages were only somewhat higher for older people.
Is $400,000 enough to retire at 65? ›
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.
What is a high net worth in retirement? ›
What is Considered a High Net Worth in Retirement? A high-net-worth individual or HNWI is generally anyone with at least $1 million in cash or assets that can be easily converted into cash, including stocks, bonds, mutual fund shares and other investments.
Can I retire at 60 with 300k? ›
£300k in a pension isn't a huge amount to retire on at the fairly young age of 60, but it's possible for certain lifestyles depending on how your pension fund performs while you're retired and how much you need to live on.
What percentage of Fidelity customers are millionaires? ›
Millionaire retirement accounts remain a rarity, making up about 2% of the roughly 24 million defined contribution plan accounts at Fidelity. These accounts holders, not surprisingly, tend to be older.
By age 30, you should have one time your annual salary saved. For example, if you're earning $50,000, you should have $50,000 banked for retirement. By age 40, you should have three times your annual salary already saved. By age 50, you should have six times your salary in an account.
Can I retire with $2 million in my 401k? ›
Summary. $2 million is far above the average retirement savings in the US. $2 million should afford you to enjoy a comfortable and happy retirement. If you choose to retire at 50, a retirement savings fund of $2 million would provide you with $50,000 annually.
How many people have $1,000,000 in retirement savings? ›
However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.
How much should a 55 year old have in a 401k? ›
By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations.
How many people are 401k millionaires? ›
Specifically, 485,000 of them. That's up 15% from the 422,000 accounts reported at the end of 2023 and 43% higher than a year ago.
How much do most Americans have in their 401k? ›
Average 401(k) Balance by Age
| Age | Average 401(k) Balance | Median 401(k) Balance |
|---|
| 35 to 44 | $97,020 | $36,117 |
| 45 to 54 | $179,200 | $61,530 |
| 55 to 64 | $256,244 | $89,716 |
| 65 and older | $279,997 | $87,725 |
2 more rowsSep 7, 2023
The earlier you begin contributing to your 401(k) savings account, the longer your money has to grow and the greater your returns can compound (or multiply). By starting your retirement savings efforts as early as possible, you increase your chances of becoming a 401(k) millionaire and successfully funding your future.
How much of the population has a 401k? ›
Among working-age individuals (ages 15 to 64), the most common type of retirement accounts in 2020 were 401(k)-style accounts (34.6%). About 18% of working-age individuals had an IRA or Keogh account, and 13.5% had a defined-benefit or cash balance plan.
What percent of income is 401k? ›
For that reason, many experts recommend investing 10-15 percent of your annual salary in a retirement savings vehicle like a 401(k). Of course, when you're just starting out and trying to establish a financial cushion and pay off student loans, that's a pretty big chunk of cash to sock away.
