Total number of 401(k) millionaires hits a record high
More than 34,000 millionaires were created in the second quarter of 2024.
A new report from Fidelity says the period of April through June saw a record number of 401(k) and IRA holders hit the millionaire mark. The number of 401(k) holders whose balance topped $1 million was up 2.5% from Q1, jumping from 485,000 to 497,000. Among IRA contributors, the number jumped 6% from 376,275 to 398,594.
“Although increases were modest, retirement savers in the second quarter of 2024 benefited from the continued upswing of the previous quarter, when contribution levels and average account balances reached record highs,” said Sharon Brovelli, president of workplace investing at Fidelity. “This quarter, Americans leveraged positive market conditions to build upon their savings and further secure their financial future.”
At the end of the second quarter, the average balance of the 401(k) millionaires stood at $1,595,200, up from $1,581,00 at the end of March.
Average balances for the more than 48 million IRA, 401(k), and 403(b) retirement accounts Fidelity manages were, of course, much lower, but also saw gains.
The average IRA, the company said, had a balance of $129,200, while the average 401(k) stood at $127,100. That was a 14% improvement from a year ago for IRA holders and a 13% jump for 401(k) customers, thanks to strong market conditions. Additionally, the financial service company said, IRA contributions from Generation X hit their highest levels in the past five years.
Americans, on the whole, are seemingly taking retirement saving more seriously amid warnings that they will not be able to maintain their current standard of living with insufficient savings. The total average 401(k) savings rates for the quarter came in at 14.2% of people’s overall income, when accounting for employer matching. Financials experts recommend 15%, but that number is rarely hit in overall averages, due to the wide spread of contributor ages.
