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Millennials Are Finally Joining the Ranks of 401(k) Millionaires
By Liliana Hall MONEY RESEARCH COLLECTIVE
New Fidelity data shows a record 654,000 Americans have $1 million or more saved in their 401(k)s.
The number of 401(k) millionaires has climbed to a record high thanks to overall market gains that lifted account balances over the summer.
According to Fidelity’s latest retirement analysis, which covers July, August and September, 654,000 savers now have at least $1 million in their workplace retirement accounts. That’s up from 595,000 at the end of June, marking the sixth consecutive quarter of growth in the typical 401(k) balance.
The average 401(k) balance reached $144,400, a 5% increase from the second quarter and up 9% compared to the same quarter one year ago. Individual retirement account (IRA) balances followed a similar pattern, rising to an average of $137,902, also a 5% uptick from June.
A major contributor to these milestones is high savings rates. Workers saved an average of 9.5% of their pay, while employers kicked in another 4.7%, bringing combined contributions to 14.2% — yet another record high that has remained steady since early this year.
That’s nearly in line with Fidelity’s recommended total savings rate of 15% — the benchmark the company says helps workers maintain their lifestyle in retirement.
Millennials — those born between 1981 and 1996 — are starting to join the ranks of 401(k) millionaires. They now represent roughly 4% of all 401(k) millionaires, up from just 1.8% a year ago. Still, Gen Xers (born between 1965 and 1980) and baby boomers (born between 1946 and 1964) continue to make up the majority of savers, at about 60% and 36%, respectively.
Fidelity confirmed these demographic figures in an email to Money on Thursday.
“Historically, the 401(k) millionaires have been Gen X and Boomers, but as they are now getting further in their careers, we’re starting to see millennials reach the million-dollar milestone, which is an interesting change to note,” Michael Shamrell, vice president of workplace thought leadership at Fidelity Investments, told Yahoo Finance.
Another standout from the report shows women with 15 years of continuous investment in their 401(k) now have an average balance of $501,100, surpassing $500,000 for the first time. This represents a 16.5% increase from this time last year.
Still, retirement confidence remains uneven. Just 6 in 10 women say they believe they’ll be able to retire with a comfortable lifestyle, compared with 75% of men who report being very or somewhat confident, according to a survey from the Transamerica Center for Retirement Studies.
The confidence gap mirrors a persistent difference in retirement savings. Men’s 401(k) balances tend to significantly outpace women’s. A 2023 Bank of America report found that the average 401(k) account balance for men was $89,000, roughly 50% higher than the $59,000 average for women.
The reason? Largely the gender pay gap, which reduces women’s lifetime earnings — and the amount they’re able to contribute to retirement accounts.
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Liliana Hall is an Austin-based reporter for Money, where she covers a range of topics, including financial news, policy, banking, investing, passive income, financial planning and student loan debt. Passionate about accessibility and financial literacy, she’s dedicated to helping readers navigate the complexities of money management and feel empowered to make informed decisions about their financial futures. Previously, Liliana covered all angles of personal finance as a writer and editor at CreditCards.com, Bankrate and CNET. Before she ever wrote about money, she worked in a handful of newsrooms across Austin, Texas, covering everything from the Texas Legislature to SXSW and the 2019 Men’s NCAA Swimming and Diving Championships. Her work has been featured in The Daily Texan, Austin Chronicle and KUT. A Texas native, Liliana graduated from the University of Texas at Austin with a bachelor’s degree in Journalism. When she’s offline, you can probably find her paddle boarding on Lady Bird Lake, riding her moped around town or reading for her book club.