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Mar 2 - Soaring number of Americans are now 401(k) millionaires



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 2 months ago '11        #1
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Sin  topics gone triple plat - Number 1 spot x69
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icon Mar 2 - Soaring number of Americans are now 401(k) millionaires
 

 
A hot stock market lifted more retirement accounts to new heights in 2023, Fidelity says.

Sweet 401(k) balances.

The number of folks with $1 million or more saved in their 401(k) accounts jumped 20% from September to the end of December, according to Fidelity Investments.

All told, there were 422,000 retirement savers in Fidelity 401(k) plans sporting balances of seven figures and beyond as of Dec. 31, up from 349,000 at the end of September and 299,000 at the end of 2022.

There were also 391,562 IRA millionaires on Dec. 31, up from 338,725 at the end of September and 280,320 at the end of December 2022.

"We are encouraged to see retirement balances increase so dramatically this quarter, reflecting the improving market conditions and enabling retirement savers to see significant gains in their account balances and retirement preparedness," Michael Shamrell, vice president of thought leadership for Fidelity Workplace Investing, told Yahoo Finance.

No kidding.

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Retirement savers ended the year with average account balances at their highest level in nearly two years. Adding to that good juju was that more than a third of workers increased their retirement savings contribution rate in 2023.

Thatís according to Fidelityís fourth quarter analysis of savings account balances for more than 45 million IRA, 401(k), and 403(b) retirement accounts.

If youíre one of the nearly 1 in 4 Americans who don't have a clue how much they have socked away in their retirement accounts, maybe itís time to take a gander.

You might be pleasantly surprised. Last year was a dream for many Americansí retirement savings account balances, with the S&P 500 index (^GSPC) up 26.3% and the Dow Jones Industrial Average (^DJI) up 13.7%.

The bigger balances, however, came from a combination of a few things, not just the strong stock market.

At the end of 2023, 78% of 401(k) savers were contributing at a rate high enough to secure the full matching contribution offered by their employer. The total average 401(k) savings rate for the fourth quarter ó a combo of employee and employer match contributions ó was roughly 14%.

In the fourth quarter, nearly half of individuals increased their contribution of their own volition without waiting for their plan to automatically add a bump up. About 1 in 4 employers offer auto-enrollment now, and the average employer default contribution rate (the amount paid into your retirement account if you donít make your own selection) is at an all-time high of 4.1%, according to the report.

401(k) millionaire keys to swelling balances

So, who are these millionaires, and whatís their secret sauce?

First, they go the distance. The average savings tenure of Fidelity account millionaire savers is 26 years. What that tells us is that it pays to continue to invest steadily over the long term. The average age of a retirement account millionaire is 59.

"The key to saving for retirement is playing the long game and maintaining consistent contributions over time," Shamrell said. "The increase in the number of 401(k) millionaires is a perfect example, as the majority of these savers arenít necessarily doing anything special other than saving at a high rate in the same plan over a long period of time."

Nearly half of Fidelityís millionaires are boomers, which was on par with the number of Gen X millionaires. Millennials accounted for just 0.8%.

Another key takeaway: It takes more than simply investing paycheck after paycheck for decades or a roaring stock market to make it over that bar. The new millionaire club members save on steroids.

The Fidelity breakdown shows that they save 17.5% of their pay on average. Their employers contribute an additional 9% to their retirement accounts for a total savings rate of 26.6%.

If you are one of these newly crowned millionaires, congratulations. Just don't get too ahead of your skis.

"My advice to these millionaires would be similar to when the market is very low," Stephanie McCullough, founder and chief executive of Berwyn, Pa.-based Sofia Financial, told Yahoo Finance. "Close your eyes and keep doing what youíve been doing. Donít get too caught up in highs and lows because both are temporary; the market is going to keep doing its thing, bouncing around."

This is not the time to ease up on the pedal. "Just because youíve hit a new milestone doesnít necessarily mean itís time to stop saving," Wes Moss, chief investment strategist at Capital Investment Advisors, told Yahoo Finance. ďLike all things personal finance, the amount of money you have socked away for retirement must be considered in the context of the money youíll need to support yourself in retirement.Ē

One caveat: Those within five years of retiring or who plan to start spending some of their nest egg might consider making a few calculated shifts. This is a good time to rebalance your retirement portfolio so you have some cash and pull a piece of profits on some of your stock appreciation.

"Start to move some of your retirement savings into short-term vehicles like a money market account," McCullough said. "Itís those years close to retirement when your investment strategy needs to get more nuanced."

"You want to have a few yearsí worth of withdrawals in something that wonít go down if the market tanks," she said.

 https://finance.yahoo.com .. 100001736.html
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76 comments

 1 month ago '05        #2
youngvito18 
Props total: 41588 41 K  Slaps total: 7079 7 K
My 401k looking gorgeous

My stock portfolio is going crazy

And to think....the last 3 years these bozos kept saying a historic depression was coming......and now they pretended it didnt happen a d they never said it

Analyst my ass
+34   

 1 month ago '08        #3
mh bich who els 
Props total: 746 746  Slaps total: 18 18
yeah this bull run is crazy. Nvidia and the semiconductors sheesh. anybody think it's a bubble (AI)?
+7   

 1 month ago '05        #4
blah blah blah  topics gone triple plat - Number 1 spot x74
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I keep my money in savings accounts fu#k a 401k
-31   

 1 month ago '23        #5
ThesOne  topics gone triple plat - Number 1 spot x7
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 blah blah blah said 🔗
I keep my money in savings accounts fu#k a 401k
emoji
+36   

 1 month ago '23        #6
ThesOne  topics gone triple plat - Number 1 spot x7
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 mh bich who els said 🔗
yeah this bull run is crazy. Nvidia and the semiconductors sheesh. anybody think it's a bubble (AI)?
It’s not. The AI Revolution will have greater implications than the Industrial Revolution. It’s gonna change societies and economies across the globe.


Last edited by ThesOne; 03-02-2024 at 01:12 PM..
+5   

Top 10 most slapped recently  1 month ago '17        #7
Bradydidit1109  topics gone triple plat - Number 1 spot x1
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Gah damn right bi#ch . This sh1t jumpin
+7   

Top 10 most slapped recently  1 month ago '17        #8
Bradydidit1109  topics gone triple plat - Number 1 spot x1
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 blah blah blah said 🔗
I keep my money in savings accounts fu#k a 401k
Great so you miss out on your employerís match (if they do match)
+21   

 1 month ago '05        #9
blah blah blah  topics gone triple plat - Number 1 spot x74
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 Bradydidit1109 said 🔗
Great so you miss out on your employerís match (if they do match)
Yeah but you might not live to see your money. You can invest in spy and get similar returns without the restrictions a 401k has
+8   

 1 month ago '14        #10
Alpallday 
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That's what I've been saying. But people rather here the sky is falling
emoji


Russian bots staying far from this one
+7   

 1 month ago '21        #11
Swisha2k11  topics gone triple plat - Number 1 spot x8
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Soaring homelessness too and record-breaking income inequality.
+27   

 1 month ago '04        #12
infam0uskills 
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people forget retirement is a financial number, not an age.

emoji
+29   

 1 month ago '16        #13
GoCop 
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yup

we all eatin at our job...

VINIX gang iykyk
+4   

 1 month ago '20        #14
Iron Stan  topics gone triple plat - Number 1 spot x3
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 youngvito18 said 🔗
My 401k looking gorgeous

My stock portfolio is going crazy

And to think....the last 3 years these bozos kept saying a historic depression was coming......and now they pretended it didnt happen a d they never said it

Analyst my ass
You know whatís funny I read this comment a couple hours ago and went to check mine.Im 32 and have been working full time since I got out of high school back in 09 and at this point in my life if I wanted to retire I could.
+12   

 1 month ago '17        #15
Ifeellikekobe  topics gone triple plat - Number 1 spot x9
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401k looking nice
emoji
+3   

 1 month ago '16        #16
GoCop 
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↪🔗

 1 month ago '15        #17
Teddy KGB 
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 ThesOne said 🔗
Itís not. The AI Revolution will have greater implications than the Industrial Revolution. Itís gonna change societies and economies across the globe.
Well, I'm not disagreeing with you but I think that you answered a different question. I do think the current AI stock bubble will burst somewhat, but I also think the technology itself is revolutionary. Just like the dotcom bubble, many companies will survive, some will fade away, some will continue to be great stocks but lose the crazy gains they recently made.
+2   

 1 month ago '09        #18
TriniSoldier  topics gone triple plat - Number 1 spot x1
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So long as kids don't start smoking meth I'm outta here at 57.
+9   

 1 month ago '20        #19
Lurkcobain 
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Bang bang ROTH IRA GANG
+4   

 1 month ago '23        #20
Rez0  topics gone triple plat - Number 1 spot x3
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If you are an older millennium and had your sh1t together enough to get a home during the 08 crash you should be sitting pretty.
+15   

 1 month ago '15        #21
Eternal Outlaw 
Props total: 8199 8 K  Slaps total: 385 385
I got a ways to go gonna start maxing my Ira out every year and get a new employer to match my 401K once I find a new gig
+7   

 1 month ago '10        #22
Kofi  topics gone triple plat - Number 1 spot x6
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I got scared money too scared to capitalize
emoji
+4   

 1 month ago '11        #23
Sin  topics gone triple plat - Number 1 spot x69 OP
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 Swisha2k11 said 🔗
Soaring homelessness too and record-breaking income inequality.
out of sight, out of mind lol


+6   

 1 month ago '19        #24
zzxxccvvbb 
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 mh bich who els said 🔗
yeah this bull run is crazy. Nvidia and the semiconductors sheesh. anybody think it's a bubble (AI)?
Only way it's a bubble is if we can't meet the power requirements for the AI revolution

(IMO)
+1   

 1 month ago '17        #25
Lazy  topics gone triple plat - Number 1 spot x3
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 youngvito18 said 🔗
My 401k looking gorgeous

My stock portfolio is going crazy

And to think....the last 3 years these bozos kept saying a historic depression was coming......and now they pretended it didnt happen a d they never said it

Analyst my ass
Weíre in a depression

But itís not a depression for everyone, just those without assets

Read about K-shaped economy for explanations from experts
+6   

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