You May Be a 401(k) Millionaire Thanks to the Surging Stock Market (2024)

FAQs

How many people have $1,000,000 in their 401k? ›

Fidelity Investments, one of the largest administrators of workplace plans, said it had 422,000 401(k) millionaires at the end of 2023, a nearly 21 percent increase from the third quarter. The number of IRA millionaires hit a record 391,562 in the fourth quarter, about 40 percent higher than a year earlier.

The average age of 401(k) millionaires at Fidelity skews older at around 59. However, Gen Xers also hit a nice milestone in the last few months of 2023. Those who have had the same 401(k) plan for 15 straight years saw average balances hit $501,000.

“If you study wealthy people, they are not focused on 401(k) [plans] and IRAs,” he told GOBankingRates. “People have gotten wealthy selling 401(k) plans and IRAs — Vanguard and Fidelity have made a lot of money managing people's retirement [savings].”

If you invested $23,000 into your 401(k) each year and earned a consistent 8% return each year, you'd achieve a plan balance of $1 million in slightly under 20 years. Note that this does not factor in a potential employer match.

It's definitely possible, but there are several factors to consider—including cost of living, the taxes you'll owe on your withdrawals, and how you want to live in retirement—when thinking about how much money you'll need to retire in the future.

Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.

If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.

The average age at which most people retire is 62, according to a 2021 Gallup Poll. But if you have $4 million in savings, it's entirely possible to retire by age 55. Retiring early offers a lot of advantages.

“By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal. “Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O'Leary said in the video.

Chick-fil-A 401(k) plan details

Chick-fil-A offers CHICK-FIL-A, INC. PROFIT SHARING PLAN through Fidelity. Their plan covers 3,171 employees.

What is the rich man's retirement plan? ›

Unlike Roth IRAs, the Rich Person Roth has no contribution limits, allowing individuals to plan for essentially unlimited amounts. Tax-free income in retirement is a significant advantage, and the strategy is suitable for those already maxing out other retirement accounts.

The value of 401(k) plans is based on the concept of dollar-cost averaging, but that's not always a reliable theory. Many 401(k) plans are expensive because of high administrative and record-keeping costs. Nonetheless, 401(k) plans are ultimately worth it for most people, depending on your retirement goals.

Fidelity also reported that the number of 401(k) accounts with balances of at least $1 million rose in the fourth quarter by 20%, to 422,000 accounts; and by 41% for the whole year. The average account balance for this group was $1,551,300 in the fourth quarter.

If you've managed to save $300k successfully, there's a good chance you'll be able to retire comfortably, though you will have to make some compromises and consider your plans carefully if you want to make that your final figure.

On average, women hit the milestone at age 58.5, while the average man became a millionaire at age 59.3. That's several years before the full retirement age of 67, but depending on how much money you plan to spend annually in retirement, $1 million may just be the tip of the iceberg.

Few investors max out their 401(k) contributions

In 2022, 15% of retirement plan participants saved the highest amount of $20,500 for that year, or $27,000 for those age 50 and older, according to Vanguard research.

How much do people save for retirement? In 2022, about 46% of households reported any savings in retirement accounts. Twenty-six percent had saved more than $100,000, and 9% had more than $500,000. These percentages were only somewhat higher for older people.

Few Americans manage to save anywhere near that sum in their 401(k)s and individual retirement accounts. A $5 million retirement nest egg puts you in the top 0.1% of households, according to an Employee Benefit Research Institute analysis of retirement accounts using the 2019 Survey of Consumer Finances.