In the second quarter of 2024, more than 34,000 millionaires were created.
A new report from Fidelity says that a record number of 401(k) and IRA holders hit the millionaire mark during the April-June period. The number of 401(k) holders with balances exceeding $1 million rose 2.5% from the first quarter, from 485,000 to 497,000. Among IRA contributors, the number rose 6% from 376,275 to 398,594.
“Although gains were modest, retirement savers benefited from the continued upswing of the previous quarter in the second quarter of 2024, when contribution levels and average account balances reached record highs,” said Sharon Brovelli, president of workplace investing at Fidelity. “This quarter, Americans took advantage of positive market conditions to build their savings and further secure their financial future.”
At the end of the second quarter, the average balance of 401(k) millionaires was $1,595,200, up from $1,581,000 at the end of March.
The average balances of the more than 48 million IRA, 401(k) and 403(b) retirement accounts managed by Fidelity were, of course, much lower, but also saw increases.
The average IRA balance, the company said, is $129,200, while the average 401(k) balance is $127,100. That’s a 14 percent year-over-year improvement for IRA holders and a 13 percent increase for 401(k) clients, thanks to strong market conditions. In addition, the financial services company said IRA contributions by Generation X are at their highest level in five years.
Overall, Americans seem to be taking retirement planning more seriously, amid warnings that they won’t be able to maintain their current standard of living without sufficient savings. The average savings rate for 401(k) plans was 14.2 percent of total income during the quarter, when including the employer match. Financial experts recommend 15 percent, but that number is rarely reached on an overall average due to the wide range of ages of contributors.
