Americans in their 30s, 40s are finally joining the 401(k) millionaire club — here's how
Americans think it will take $1.46 million, on average, to retire comfortably, according to a 2024 study by Northwestern Mutual. And reaching $1 million in retirement savings is a step in the right direction.
There's good news from Fidelity about that, and that 401(k) millionaires are on the rise thanks to rising employee contribution rates and stock market gains. And the other good news is that millennials are finally joining the 401(k) millionaire club, albeit slowly.
Although savers ages 28 to 43 represent less than 2% of 401(k) millionaires among Fidelity enrollees, the fact that some have reached that point is remarkable. And rightly so, you can, too.
During the third quarter of 2024, Fidelity reports that the number of 401(k) holders increased by 9.5% from the previous quarter. Overall, there were 544,000 people in that category during the previous quarter, compared to 497,000 in Q2.
It's also important to note that the average 401(k) balance overall was up 23% from last year. As of this past quarter, it sits at $132,300.
Balances are also higher among savers who have continued to contribute to their 401(k)s for many years. The average balance of Gen X workers who have been saving in their 401(k) for 15 consecutive years grew to $586,100 last quarter. This tells us that the average 401(k) millionaire has probably been funding their account for a very long time.
Among millennials, the average 401(k) balance now sits at $66,500. Given that older millennials are only in the middle of their careers and younger millennials have many working years ahead of them, it's fair to assume that the balance between 28- to 43-year-olds will continue to grow over time.
Read more: The cost of living in America is still manageable – use these 3 'real assets' to protect your wealth today
Becoming a 401(k) millionaire may be more possible than you think. But the key is to save consistently and, if you're missing that boat already, start small.
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