By Durva More

Copyright indiatimes

TIL Creatives

In a world of early investing—even if you are a lowly paid intern at a makeshift magazine—the savers have turned to be big money magnets, with now more than half a million people with 401(k) accounts turning up as millionaires. In end of March, there were already 512,000 people who had a million dollars or more courtesy their 401(k) savings account. The number was lower than 537,000, which was at the end of last year. But it bounced back to a strong 595,000 at the end of June. In the first quarter, the number was 512,000, down from 537,000 at the end of last year, so this is a strong rebound. Mike Shamrell, vice president at Fidelity, told Yahoo Finance that despite market turbulence in April, most savers stayed invested and kept saving, which helped them benefit from the rebound later in the quarter, as reported by Yahoo Finance. 401(k) savings habits matterThe number of millionaires rises and falls with the market, and they are still a small group within Fidelity’s total 401(k) participants. The average 401(k) millionaire is 59 years old, has been saving in their employer’s plan for about 25 years, and contributes 17.6% on their own, plus employer matches that bring it to 26.2% total savings. Shamrell said this shows the importance of a long-term focus on retirement goals. Regular contributions are the key factor which adds money steadily, even when the market is shaky, and builds wealth over time. All in all, average 401(k) savings rates remained at a record high of 14.2%, very close to Fidelity’s suggested rate of 15%, according to the report by Yahoo Finance.Only 5.5% of savers changed their 401(k) investments between March and June. In the second quarter average account balances hit record highs. The average 401(k) balance increased to $137,800, which is up by 8% from last year and higher than $127,100 in March. Other accounts also grew, 403(b) balances increased by 9% to $125,400, and IRAs climbed 8% to $131,366 from March. Live EventsIRA millionaires and retirement growthThis data comes from 25,600 retirement plans covering 24.6 million 401(k) savers, 7.8 million IRAs, and 403(b) plans covering 9 million participants. IRA savers also saw growth — the number of IRA millionaires jumped 16% to 501,481 by June, up from 432,431 in March. Average IRA contributions stayed steady around $2,223–$2,225 over the past year, but Gen X contributions rose 25% and boomer contributions rose 37% from the same quarter in 2024, as stated by Yahoo Finance. The Vice President of retirement offerings at Fidelity, Rita Assaf, told Yahoo Finance that Gen X and boomers are in their highest earning years, so they can save more and are increasing contributions as retirement comes closer. People aged 50 and older can make extra “catch-up” contributions, $7,500 more in a 401(k) and $1,000 more in an IRA, providing them to save up to $8,000 in an IRA for the 2025 tax year.Assaf said many are taking advantage of these extra contributions. Still, worries remain — 54% of respondents said they are very or extremely concerned about the economy, the highest concern level since 2021, and up from 37% last year, as per the reports. FAQsQ1. Why are 401(k) millionaires increasing in 2025?Because most savers stayed invested, kept contributing, and benefited from the market rebound.Q2. How much do 401(k) millionaires usually save?On average, they save about 17.6% of their income, plus employer matches that bring it to 26.2%.Add as a Reliable and Trusted News Source Add Now!
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onretirement accounts growth401(k) millionairesretirement savingsIRA millionairesretirement savings growthira millionairesaverage 401(k) balancemarket rebound retirement(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates….moreless