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A record number of millionaires created in US by rock-solid 401(k) market
The Independent • • business
Key Points:
- The number of 401(k) accounts holding at least $1 million on Fidelity's platform rose 19% in Q2 to a record 769,000, driven by strong stock market gains and steady employee contributions.
- The S&P 500 gained about 15% in Q2, its best quarterly performance since 2020, supported by AI demand, robust corporate earnings, and federal tax cuts, boosting investor confidence despite inflation and geopolitical tensions.
- About 3% of Fidelity's 25.8 million 401(k) account holders are millionaires, with average employee contribution rates remaining at a record 9.6%, highlighting consistent long-term saving habits rather than market timing.
- Despite the milestone, the average 401(k) balance remains $155,800, and many workers express concern about retirement readiness due to factors like debt, healthcare costs, and inflation.
- Financial experts caution that $1 million is not a universal retirement target as living costs vary, with some Americans estimating they need closer to $1.46 million to retire comfortably, especially in major metropolitan areas.
