A Record Number of Americans Are in the 401(k) Millionaire Club
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A record number of 401(k) accounts had $1 million or more at the end of the second quarter. Amid tariff uncertainty that roiled the stock market, investors who stuck to their long-term savings plans in the spring were rewarded.
The stock market has more than rebounded from the selloff earlier in the year that followed the president’s tariff announcements.
Stocks notched record highs earlier this month, and the S&P 500 is up about 10% year-to-date. Recent earnings beats from large companies, including Nvidia, and anticipation of interest rate cuts have driven gains in the stock market. The growth is helping Americans’ 401(k)s hit fresh records.
New research from Fidelity reveals that 595,000 accounts held $1 million or more at the end of the second quarter, an all-time high and an increase from 512,000 at the end of the first quarter. A year ago, there were 497,000 accounts with $1 million or more.
"Even during periods of turbulence, the majority of savers are wisely making the decision to stay the course and not make sudden changes to their retirement investments," Sharon Brovelli, president of workplace investing at Fidelity Investments, said in a release Thursday. "This diligence and focus on long-term retirement goals contributed to this quarter's retirement balance rebound.”
Average 401(k) balance hits a new high
While million-dollar 401(k)s represent just a sliver of all accounts, smaller-dollar 401(k) accounts also performed well in the second quarter, helping savers get closer to their retirement goals.
The average 401(k) balance ($137,800) is up 8% in the past year, according to Fidelity. That was the largest increase in a quarter since the end of 2023.
The report found that the average 401(k) savings rate was 14.2% in the second quarter, including employer contributions. That’s just below Fidelity's recommended rate of 15%.
Recent growth in the stock market has been impressive, and savers obviously can’t count on it to repeat.
But making steady 401(k) contributions — and increasing your paycheck deferrals when you can — will remain key to long-term retirement planning success, regardless of what’s going on in the stock market day-to-day.
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