(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
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. Fidelity is one of the largest providers of workplace retirement plans, and its 401(k) data is based on more than 23 million plan participants.
How many Americans have $1000000 in their 401k? ›
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.
What percentage of Americans 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.
How many millionaires are soaring in 401k? ›
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.
What is the top 1 percent net worth at retirement? ›
The top 1% of household net worth in the U.S. was just shy of $13.7 million in 2023. An individual would have to earn an average of $407,500 per year to join the top 1%. A household would need an income of $591,550.
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.
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.
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.
Is Fidelity laying off? ›
This week, Fidelity International which was separated from Fidelity Investments in 1980 announced that it will be laying off around 1,000 employees globally this year.
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.
Can I retire at 62 with $400,000 in 401k? ›
If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.
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.
What is 90% of all millionaires? ›
' - Andrew Carnegie? - Quora. How true is the quote "Ninety percent of all millionaires become so through owning real estate." - Andrew Carnegie? Probably as true as the statement “83.7% of all statistics are made up!”.
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.
How much does a million dollar 401k pay? ›
The classic rule is that you should plan to withdraw about 4% from your retirement account each year. Accounting for income, returns and drawdown on principal, this should give you several decades of savings. A $1 million retirement account gives you around $40,000 per year for the first few years of your retirement.
