American 401(k) millionaires drop by a third from 2021 to 2022

Per CBS News

The number of Americans that are recorded as 401(k) millionaires have dropped by a third from 2021 to 2022, per Fidelity Investments data. From 422,000 millionaires in 2022, those with over a million in their 401(k) accounts have dropped down to just 299,000.

The decline in millionaires per 401(k) accounts comes after the stock market saw a significant drop in 2022. The S&P 500 alone fell by 19.4% throughout last year, which was one of the causes for the number of 401(k) millionaires to drop by 32%.

This comes after the market saw its longest bear market since the financial crisis which happened in 2008. Aside from the drop in 401(k) millionaires, the average 401(k) balance dropped by 20.5% last year.

By the end of 2022, because of the 20.5% decline in average balances, the remaining amount dropped down to just $103,900 by the end of last year. Despite declining by a third, there were still more 401(k) millionaires recently compared to 2019 numbers.

In 2019, there were only 233,000 401(k) millionaires, which ballooned to 422,000 in 2021 before dropping again to 299,000 last year. IRA millionaires also saw a massive decline, down by 25% in 2022 from a year before.

There were reportedly 280,320 IRA accounts with at least a $1 million balance left. A recent study reportedly found that the number that average workers who think they need to retire also increased by 20% in 2022 compared to a year before.

This comes at a time when Gen Z retirement savings drop to an average of just $33,000. On average, Baby Boomers had the most retirement savings at a $162,000 median.

This came as American personal saving rates dropped to 17-year-low numbers while household debt continues to increase. In October 2022, disposable income savings dropped to just 2.3%.

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