Record surge in million-dollar 401(k) accounts amid strong market and high contributions
Fidelity reports a record number of 401(k) accounts exceeding $1 million, driven by a bullish stock market and unusually high employee contribution rates.
Fidelity Investments disclosed that the count of 401(k) accounts with balances of at least $1 million reached a new high in the second quarter, marking a 19% increase over the previous quarter. The surge coincides with a strong stock market, highlighted by a 15% gain in the S&P 500 over the three months to June 30, and a record average employee contribution rate of about 9.6%. Michael Shamrell, Fidelity’s vice president of thought leadership, said the majority of these million-dollar accounts belong to older workers who have saved consistently for many years.
He emphasized that the milestone is less important than the saving habits that lead to it. Nevertheless, a survey by NFP found that a large majority of workers still feel they are falling behind on retirement savings, with average balances far below the million-dollar mark. While optimism about personal finances has risen, concerns about inflation, cost of living, and geopolitical risks persist.
Why it matters
The rise in million-dollar 401(k) balances shows how market gains and higher savings rates can boost retirement wealth, but most workers still feel insecure about their future.
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