The number of 401(k)-created millionaires has reached a new peak as pension balances overall growth for the third consecutive quarter.
Fidelity analyzed more than 48 million retirement accounts, including IRAs, 401(k)s, and 403(b)s, to the latest quarterly retirement analysis. The study found that in the second quarter of 2024, the number of 401(k) millionaires reached a new high of 497,000 people.
That's 12,000 more 401(k) millionaires in the second quarter compared to the previous quarter.
Millionaires created by IRAs also jumped 6% from the first quarter to the second, going from 376,275 to 398,594 people.
Meanwhile, average retirement account balances have increased. The average 401(k) balance reached $127,100, up from $112,400 in the second quarter of 2023, while 403(b) balances reached $114,700 compared to $102,400 last year.
The average IRA balance was the highest, at $129,200 this quarter.
What contributes to high retirement balances? Fidelity says starting early and saving consistently is key.
“Through the ups and downs of the market, we always emphasize the importance of making sustainable retirement contributions.” said Sharon Brovelli, president of workplace investing at Fidelity Investments.
The report showed that those who stayed with the same plan with the same employer for 15 years grew their 401(k)s to an average balance of $531,200 — just over half a million dollars.
Four out of five pension plan holders also received an employer contribution last quarter, which is in line with the 79.5% of employees who received contributions from their workplaces at the same time last year.
The second quarter continued the trend of high levels of contributions and account balances created in the previous quarter.
“Although the increases were modest, pension savers in the second quarter of 2024 benefited from the continued growth of the previous quarter, when contribution levels and average account balances reached record levels,” Brovelli said.