Millionaire 401(k) Accounts Hit Record High at Fidelity
(Bloomberg) — Retirement feels more elusive than ever for many Americans, but 401(k) millionaires are proliferating after years of steady investing and a strong run in the stock market.
The number of millionaire 401(k) accounts at Fidelity Investments rose 19% to a record 769,000 between the first and second quarter, according to a report released Thursday. It was the largest quarterly increase since the fourth quarter of 2023, the company said.
Aiding savers was a blockbuster quarter for equities. The S&P 500 Index gained about 15% in the three months ended June 30, its strongest performance since 2020. The average 401(k), 403(b) and IRA account balances on Fidelity’s platform rose to all-time highs, while savings rates for workplace retirement plans also held at record levels, the company said.
“That million-dollar figure across American society just still holds a little bit of cachet, whether it’s a million-dollar home or a million-dollar lottery ticket or Who Wants To Be A Millionaire,” said Michael Shamrell, vice president of thought leadership at Fidelity Investments. “We’re not saying that a million dollars is the end-all, be-all, and that’s everything you’re going to need.”
Retirement savers are hitting the landmark even while many report feeling underprepared for their later years. The share of workers who say they feel confident about having enough money to live comfortably throughout retirement fell to the lowest level since 2017, according to a joint Retirement Confidence Survey from the Employee Benefit Research Institute and Greenwald Research released earlier this year.
Debt, inflation and rising housing and healthcare costs are hampering savings plans, according to the research. Others are worried about the future of Social Security. New projections from June estimate that the Social Security Trust Fund may be depleted by 2032.
Estimates vary widely on how much people need to save for retirement. The size of that nest egg depends on where they live, their expenses, financial goals and desired standard of living. Americans say they need $1.46 million on average to retire comfortably, according to Northwestern Mutual’s 2026 Planning & Progress Study.
David Rae, a certified financial planner based in Los Angeles, said at least half of his clients are “retirement-account millionaires” — people with at least seven-figure balances across their long-term savings, which can include their 401(k), traditional or Roth IRAs, brokerage accounts and stock options. Many live in high-cost cities across southern California or in San Francisco.
Rae said he often advises clients that they may need to save $4 million to $5 million — and sometimes as much as $10 million — just to maintain their standard of living in retirement.
“It’s maybe not as big a deal to be a millionaire as it might’ve been when you watch Gilligan’s Island in the ‘60s,” he said. “The millionaire was a rich person. Now, it just doesn’t go as far as it used to.”
A million-dollar 401(k) can also put a saver in a tricky tax situation, especially if most of the money comes from pre-tax contributions, Rae said. Those contributions and their investment gains are generally taxed as income when withdrawn. And once required minimum distributions kick in, savers have less control over when to take money from the account. By contrast, Americans who contribute to a Roth 401(K) or Roth IRA have already paid taxes on those funds, allowing them to make tax-free withdrawals in retirement.
“You’re still in a good place if you have a million dollars” in a 401(k), he said. But “you could do a little better.”
Brittany Maltby, 37, became a millionaire on paper shortly after she turned 30. Her seven-figure net worth is split between her 401(k), which has about $750,000, and her brokerage and Roth accounts.
She said she amassed her wealth by saving aggressively early in her career. The financial planner expects to have $5 million saved by age 65, allowing her to spend roughly $200,000 a year in retirement.
After her net worth hit $1 million, Maltby said she balanced her savings between brokerage and high-yield savings accounts, opting for them in addition to a traditional retirement account because the money can be accessed at any time.
“I’m always going to have an investor mentality. I never see myself not investing,” Maltby said. “The mentality is really just about diversifying what you’re investing in, and starting to look at options outside of just retirement buckets.”
To contact the authors of this story:
Sarah Foster in New York at [email protected]
Michelle Amponsah in New York at [email protected]
