The number of 401(k) millionaires surged 43% from a year ago, driven by market gains and steady contributions. These millionaire success stories took an average of 26 years to achieve, according to Fidelity Investments.
In the first quarter, there were 485,000 401(k) millionaires, a 15% increase from the previous quarter's 422,000 and a 43% rise from last year's count of 340,000, Fidelity reported.
These millionaires didn’t become wealthy overnight. On average, these account holders have been in their plans for 26 years and have an average contribution rate of 17%, Fidelity noted.
The average first-quarter balance for 401(k) accounts was $125,900, up 16% from the first quarter of the previous year. The median 401(k) balance was $28,900. For 403(b) accounts, the retirement accounts for government and nonprofit workers, the average balance was $113,000, up 15% from a year ago.
Meanwhile, the average IRA balance reached $127,745, up 13% from the previous year, according to Fidelity. IRA accounts tend to have slightly higher balances than 401(k)s because people often consolidate multiple 401(k)s into an IRA, Fidelity explained.
Fidelity’s analysis covered more than 45 million IRA, 401(k), and 403(b) accounts.
"We are encouraged to see account balances increase, providing solid proof that retirement savers are remaining invested and continuing to make steady contributions—while seeing the financial benefits as a result," said Sharon Brovelli, president of workplace investing at Fidelity.
The S&P 500 index rose 10.6% in the first quarter.
Despite the gains in retirement accounts, average account balances are still far below what Americans feel they need to retire comfortably. In the U.S., adults believe they will need $1.46 million to retire comfortably, according to Northwestern Mutual's 2024 Planning & Progress Study.
