The 401
The number of 401(k) millionaires rose to a record high thanks to the overall market’s moderated account balance over the summer.
According to Fidelity’s latest retirement analysis, covering July, August and September, at least 654,000 savers have $1 million in their retirement accounts. That’s up from 595,000 in late June, marking the sixth quarter in a row for the average 401(k) balance.
The average 401(K) balance reached $144,400, a 5% increase from the second quarter and 9% compared to the same quarter one year ago. Individual Retirement Account (IRA) balances followed a similar pattern, increasing by an average of $137,902, also a 5% increase from June.
The biggest impact on these milestones is high savings rates. Employees save an average of 9.5% of their own, while employers kick in another 4.7%, bringing the combined contributions to 14.2% – another record high that has remained strong since the beginning of the year.
It’s almost in line with Fidelity’s recommended final total of 15% – Benchmark The company says the company says it helps employees maintain their lifestyle rather than retire.
Millennials – Those born between 1981 and 1996 – are starting to join the ranks of 401(k) million. They now represent about 4% of the 41(k) million, up from 1.8% a year ago. However, Gen Xers (born between 1965 and 1980) and baby boomers (born between 1946 and 1964) continue to make up the majority of helpers, at about 60% and 36%, respectively.
Fidelity confirmed these figures in an email on Thursday.
“Historically, millions of 401 (k) have been 40 and boomers, but as they begin to continue in their careers,” said Michael Shamrell, the Phrice President of the watch, which is a happy change to be aware of the leadership, told Yahoo money.
Another standing report shows women with 15 years of continuous investment in a 401(k) now have an average balance of $501,100, surpassing $500,000 for the first time. This represents a 16.5% increase from this time last year.
However, retirement confidence remains uneven. Just 6 out of 10 women say they believe they will be able to retire with a comfortable lifestyle, compared to 75% of men who report being more confident, according to research from the Transamerica Center for Retirement Studies.
The confidence gap reflects persistent differences in retirement savings. Men’s 401(k) rates tend to outstrip women’s. The 2023 American Accountability Report found that the 401(K) account balance of $89,000, about 50% higher than the average for women of $59,000.
The reason? So much is the gender pay gap, which reduces women’s lifetime earnings — and the amount they can contribute to retirement accounts.
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