Photo credit: www.entrepreneur.com
Record Number of 401(k) Millionaires Achieved as Retirement Savings Grow
A significant milestone has been reached in the realm of retirement savings, with the latest analysis revealing that the count of 401(k) millionaires has surged to unprecedented levels, marking the third consecutive quarter of growth in overall retirement account balances.
According to Fidelity’s recent quarterly retirement analysis, which examined over 48 million retirement accounts including IRAs, 401(k)s, and 403(b)s, the number of millionaires in 401(k) plans has now reached 497,000 as of the second quarter of 2024. This represents an increase of 12,000 individuals from the previous quarter.
Additionally, the report indicates a rise in IRA millionaires, with figures climbing 6% from the first to the second quarter, from 376,275 to 398,594.
Retirement Account Growth Trends
Alongside the increase in millionaires, average balances in retirement accounts have also seen considerable growth. The average 401(k) balance rose to $127,100, up from $112,400 in the same quarter last year. Meanwhile, average 403(b) balances reached $114,700, compared to $102,400 in the previous year.
The IRA balance recorded the highest increase, reaching an average of $129,200 this quarter.
Strategies for Retirement Savings Success
Fidelity attributes these soaring balances to a combination of early starting and consistent saving practices. Sharon Brovelli, president of workplace investing at Fidelity Investments, emphasized, “Through market ups and downs, we always stress the importance of making steady retirement contributions.” This advice highlights the importance of sustained financial commitment in achieving retirement goals.
Moreover, individuals who remained with the same retirement plan and employer for a duration of 15 years saw their 401(k) balances reach an average of $531,200, a noteworthy achievement reflecting the benefits of long-term dedication to saving.
Employer Contributions and Continued Growth
The report further showed that a significant portion of retirement account holders—four out of five—received employer contributions in the last quarter, aligning with the 79.5% figure noted in the same quarter the previous year. This consistency contributes to the upward trajectory of contribution levels and account balances established in prior quarters.
“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,” Brovelli added, underlining the ongoing positive trend in retirement savings.
As more individuals prioritize their financial futures through diligent saving and wise investment strategies, the landscape of American retirement savings continues to evolve, promising a brighter outlook for individuals approaching retirement age.
Source
www.entrepreneur.com