Retirement Millionaires on the Rise: Fidelity Investments Report
According to a recent report released by Fidelity Investments, the number of retirement millionaires has increased significantly in the second quarter. The report revealed a double-digit growth in the number of individuals holding seven-figure amounts in their 401(k) accounts and Individual Retirement Accounts (IRAs).
In the second quarter, the number of 401(k) millionaires rose by 10%, while IRA millionaires increased by an impressive 13%. Fidelity reported a total of 378,000 401(k) millionaires and 349,100 IRA millionaires during this period.
Not only did the number of retirement millionaires increase, but the average balance in various retirement accounts also experienced a boost for the third consecutive quarter. IRAs saw a quarter-over-quarter increase of 5%, reaching an average balance of $113,800. 401(k) accounts, on the other hand, had an average balance of $112,400 after a 4% growth in the second quarter. Additionally, 403(b) accounts had an average balance of $102,400, reflecting a 5% increase.
The growth in retirement account balances can be attributed to multiple factors, such as steady contributions from both employers and employees, as well as positive market conditions. Baby boomers, millennials, and Generation X and Z all witnessed increases in their 401(k) account balances. Millennials, in particular, saw the largest increase of 24.5%, while Generation X experienced a rise of 14.5%. Interestingly, even though baby boomers had the smallest increase, they had the highest total savings rate at 16.6%.
The report emphasized the importance of maintaining high contribution and savings rates to improve retirement readiness. It highlighted that a separate study conducted by Northwestern Mutual found that just over half of U.S. adults expected to be financially prepared for retirement. Furthermore, individuals now anticipate staying in the workforce until the age of 65, a year longer than the previous year, indicating a growing awareness of the need for prolonged financial stability.
With the number of retirement millionaires on the rise and the average balance in retirement accounts consistently increasing, it is evident that individuals are taking retirement planning and savings seriously. The Fidelity Investments report serves as a reminder for everyone to prioritize long-term financial goals, especially with an eye towards retirement.
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