(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. That's up a whopping 43% from the 340,000 401(k)-created millionaires a year ago.
How many Americans have $1,000,000 in their 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 many millionaires does Fidelity have? ›
There are now 485,000 retirement accounts with at least $1 million—up 43% from 340,000 401(k)-created millionaires a year ago, according to new data published by Fidelity Investments on Thursday.
How many people have 500k in 401k? ›
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.
What percentage of the population maxes 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.
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 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
Relatively few embrace working with multiple advisors (13%) or any individual advisor managing other advisors (quarterback approach, 5%). those with $1 million to $5 million in investable, non-retirement assets, and ultra-high-net-worth are investors with over $5 million in investable assets.
Which US state has the most millionaires? ›
American states with highest ratio of millionaire households per capita in 2020
| Characteristic | Ratio of millionaire households per capita |
|---|
| California | 8.51% |
| New Hampshire | 8.47% |
| Virginia | 8.31% |
| Alaska | 8.18% |
9 more rowsFeb 2, 2024
Fees. Fidelity has average trading and low non-trading fees, including commission-free US stock trading. On the negative side, margin rates and fees for some mutual funds can be high. We compared Fidelity's fees with two similar brokers we selected, E*TRADE and TD Ameritrade.
The number of 401(k) millionaires rose 20% during the fourth quarter of 2023 compared to the previous quarter. Funding your 401(k) from a young age and investing savvily could lead you to a balance of $1 million or more in your lifetime.
What is the average age of a 401k millionaire? ›
The average age of 401(k) millionaires at Fidelity skews older at around 59. However, Gen Xers also hit a nice milestone in the last few months of 2023. Those who have had the same 401(k) plan for 15 straight years saw average balances hit $501,000.
How long will $400,000 last in retirement? ›
Using the standard 4% withdrawal rule, this would let us pull $16,000 per year from the retirement account. Combined with Social Security, this would give you almost $32,000 per year in pre-tax income. This isn't much to live on and it would only last you about 25 years before your portfolio runs out.
How many people have $1,000,000 in retirement savings? ›
In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved.
How many Americans are 401k millionaires? ›
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.
What percentage of retirees have $2 million dollars? ›
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
How long will $1 million in 401k last in retirement? ›
Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.
How much does the average American have in their 401k? ›
Average 401(k) plan balances reached $112,572 in 2022, down from $141,542 in 2021 and $129,157 in 2020, according to Vanguard's “How America Saves 2023” report. While short-term market volatility is inevitable, it's important not to overreact to large swings in price.
What is the net worth of the top 1 percent? ›
In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd. As of the end of 2023, this ultra-high net worth population is on the rise, reaching 626,000 globally, up from just over 600,000 a year earlier.
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.
