A record number of retirement savers are perched on a cool $1 million or more in their 401(k)s or IRAs, according to Fidelity Investments.
The pool of 401(k) millionaires climbed 16% from the end of March to reach an all-time high, totaling 595,000 at the end of June, per the survey.
It was quite a rebound from the first quarter when only 512,000 savers had at least $1 million in their nest egg, down from 537,000 at the end of last year.
Read more: What is a 401(k), and how does it work?
“Despite the market turbulence of early April, our data shows the majority of retirement savers stayed the course with their savings, choosing not to make any sudden moves and to continue to save,” Mike Shamrell, vice president of workplace thought leadership at Fidelity Investments, told Yahoo Finance. “As a result, these retirement savers were able to benefit from the market rebound that occurred later in the quarter.”
The number of people who hit the millionaire milepost seesaws with the market. And they make up a small percentage of Fidelity’s 401(k) participants.
The average 401(k)-created millionaire is roughly 59 years old and has been in their employer’s plan for an average of 25 years. Plus, they are seriously all in when it comes to saving. Their average individual savings rate is about 17.6%. If you add employer matches, it totals 26.2%.
In other words, they are reaping the rewards of maintaining what Shamrell calls a “long-term focus on retirement goals.”
Regular contributions are the crux of it all. Methodically adding funds to your accounts, regardless of what the market is up to, has a cumulative impact that’s pivotal to building wealth.
To that end, total average 401(k) savings rates held steady from earlier this year at a record high of 14.2%, a combination of employee and employer 401(k) contributions. This number remains close to Fidelity’s suggested savings rate of 15%.
Additionally, only 5.5% of retirement savers made a change to their 401(k) asset allocation from the end of March to the end of June.
Average account balances also reached new record highs in the second quarter.
Fidelity’s average 401(k) balance rose to $137,800, an increase of 8% from a year ago and a jump from $127,100 at the end of March.
Average balances for other plans also climbed: 403(b) accounts gained 9% to $125,400 from the first quarter, while individual retirement accounts rose 8% to $131,366 from the end of March.
The 401(k) data is based on 25,600 defined-contribution plans at various companies across the country, covering 24.6 million participants, as well as 7.8 million IRA accounts and 403(b) data on 10,677 tax-exempt plans, covering 9 million participants.
