401(k) millionaires are on the rise after taking a hit last year. Boomers are leading the way
401(k) millionaires are on the rise after taking a hit last year. Boomers are leading the way
Boomers are leading the way.
This is kind of silly. Basically it's just saying that stocks have rallied this year. US stocks are up ~14% YTD, and international stocks are up ~5% YTD.
So the more you had invested, the more "dollars" you made this year.
Last year was net down, so it makes complete sense that people with more money lost more "dollars" last year.
It's not just boomers.
Young savers have done especially well. Gen Z saw a 66% increase in average 401(k) balances compared to a year ago, while millennials saw a 24.5% increase. Average Gen X balances were up 14.5%, and baby boomers saw an average increase of 6.3% compared to a year ago.
Source from Fidelity (PDF)
I'll be curious to see what these numbers look like once student loan repayments start back up in October. I know I'm personally going to have to cut back my 401(k) contributions - which I increased during the payment pause over the last few years - in order to resume my payments, even with an IDR plan.
This is the best summary I could come up with:
But this year brings better news: account balances are growing by double digits over the past 12 months.
The growth is so strong, in fact, that the share of 401(k) millionaires has grown by 25% so far this year, according to Fidelity Investments’ Q2 2023 retirement analysis.
Of course, there are many people in the U.S. who do not have a retirement account at all, and balances vary significantly depending on factors like age, profession, and income.
The total contribution rate—which combines employee and employer contributions—for the second quarter was 13.9%, in line with what many experts advise (Fidelity suggests 15%).
“A million dollars isn’t what it used to be, but it can still provide a comfortable retirement if done right,”Gates Little, president and CEO at the Southern Bank Company, previously told Fortune.
“While everyone’s financial situation is different, Fidelity suggests taking a long-term approach to saving and avoiding making changes based on short-term economic swings—positive or negative,” the report reads.
I'm a bot and I'm open source!
Curious about the downvotes here. Jealous bots?
Gee, people who have been saving longer have saved more money! Who'd a thunk?
Many people roll their old 401ks into IRA when changing jobs, so they are seriously undercounting millionaires.
Thank you for sharing!