Number of 401(k) ‘millionaires’ jumped 41% last year, says Fidelity | CNN Business (2024)

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Number of 401(k) ‘millionaires’ jumped 41% last year, says Fidelity | CNN Business? ›

Fidelity also reported that the number of 401(k) accounts with balances of at least $1 million rose in the fourth quarter by 20%, to 422,000 accounts; and by 41% for the whole year. The average account balance for this group was $1,551,300 in the fourth quarter.

Fidelity Investments, one of the largest administrators of workplace plans, said it had 422,000 401(k) millionaires at the end of 2023, a nearly 21 percent increase from the third quarter.

Only about 1.6% of 401(k) accounts and 2.5% of IRAs at Fidelity have account balances of at least $1 million. Even while that millionaire status evades the vast majority of savers, workers today predict they'll actually need much more than that — about $1.8 million — to retire comfortably.

The financial services firm handles more than 45 million retirement accounts total. The average 401(k) balance ended 2023 up 14% from a year earlier to $118,600, Fidelity found. The average individual retirement account balance also gained 12% year over year to $116,600 in the fourth quarter of 2023.

The only time when 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 record 391,600 accounts. The average age of 401(k) millionaires at Fidelity skews older at around 59.

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.

The average 401(k) balance rose to $118,600 at the end of the fourth quarter, up 14% for the year. Among Gen Xers, the demographic cohort that will start retiring over the next decade, Fidelity found that the average 401(k) balance topped $500,000 among those who have been saving for at least 15 years consecutively.

All told, there were 422,000 retirement savers in Fidelity 401(k) plans sporting balances of seven figures and beyond as of Dec. 31, up from 349,000 at the end of September and 299,000 at the end of 2022. There were also 391,562 IRA millionaires on Dec.

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.

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 many Fidelity millionaires are there? ›

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 quarter to 422,000, marking a sharp recovery from the previous quarter's 7.7% drop, an analysis released by Fidelity on Tuesday shows.

There can be several reasons your 401(k) lost money, including a recession or stock market correction, your portfolio not being diversified enough, or investing too aggressively for your risk tolerance.

Fidelity is a great pick for a 401(k) because of its robust investment options and strong advisory and administrative support. Fidelity can offer literally thousands of mutual funds to participants, and advisors can help companies craft a plan that works for them.

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.

You can probably retire at 55 if you have $4 million in savings. This amount, according to conventional estimates, can reliably produce enough income to pay for a comfortable retirement.

So, if you're aiming for $100,000 a year in retirement and also receiving Social Security checks, you'd need to have this amount in your portfolio: age 62: $2.1 million. age 67: $1.9 million. age 70: $1.8 million.

Fidelity Reports 422,000 401(k) Millionaires -- You Can Join Their Ranks | The Motley Fool.

The total number of retirement savers in Fidelity 401(k) plans with balances reaching seven figures reached 422,000 on December 31, 2023, a significant rise from the total of about 349,000 millionaires at the close of Q3 2023. The number is close to the record high of 442,000 millionaires at year-end 2021.

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.