By Steve Dinnen
Yes, you can get rich at a 9-5 job, and we now have a record high number of 401(k) millionaires to prove it.
Reviewing 24 million 401(k) plans across the nation, Fidelity Investments estimates that as of the second quarter 2024, there are now 497,000 accounts with values exceeding $1 million. Individual retirement account (IRA) participants have also reached a record with 399,000 of them now carrying balances of $1 million or more.
The average retirement account balance grew for the third consecutive quarter, with 401(k) and IRA balances up 1% to $127,100 and $129,200, respectively. Those numbers fall well short of that $1 million mark, but remember that both 401(k)s and IRAs include a lot of bonds that haven’t performed as well as stocks. Plus, these numbers look at participants of all ages; some have been in the programs for five years, while others have been contributing for 45 years. The 401(k) debuted in 1978.
The average 401(k) account balance is up 13% from a year ago, and the average IRA account balance is up 14%. That looks good, but consider that over the same period, the Dow Jones Industrial Average was up 18%, and the S&P 500 climbed about 24%.
So, you’re doing well, but with just a little more effort, you may be able to catch up.
Sharon Brovelli, president of workplace investing at Fidelity Investments, said in the study that contribution levels have reached record highs. There’s that extra effort.
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