Ranks of 401(k) millionaires surged on workers' savings stamina, Fidelity says

Slow and steady, steady and slow appears to be the way to go for workers looking to save up $1 million in their 401(k)s.

That's one of the headline findings from a new report by Fidelity, which found the number of workers with at least $1 million in their 401(k) accounts leapt by 27 percent in 2024.

In the latest analysis of its retirement plan membership, Fidelity found the number of 401(k) millionaires – those with at least seven figures in their workplace retirement accounts – grew to 537,000 in 2024, up from 422,000 the year before. On average, these investors are 59 years old and have been contributing to the same employer-sponsored plan for 26 years.

Across age cohorts, Generation X represented the largest share of 401(k) millionaires at 57 percent, followed by baby boomers at 41 percent and millennials at 2 percent. Baby boomers, many of whom are already drawing on their savings, have seen their balances fluctuate as they use funds for retirement expenses, Fidelity noted.

The new data show continued positive momentum from Fidelity's mid-2024 read, during which it counted 497,000 401(k) millionaires and 398,594 IRA millionaires.

While a million dollars doesn't mean as much as it used to in ensuring a comfortable retirement – a Northwestern Mutual survey last year pegged the "magic number" for Americans on average at $1.5 million, with Gen X women setting an even higher $2.1 million bar – Fidelity's findings paint an encouraging picture of how people are building up their nest egg.

Saving past volatility

As MarketWatch noted, retirement account balances dipped slightly in the fourth quarter of 2024 due to softer market conditions. The Dow Jones Industrial Average posted a 0.9 percent return in the fourth quarter, while the S&P 500 gained 2 percent. Despite that Fidelity said many savers kept up with healthy savings habits, including consistent contribution rates.

“There was a slight drop in the fourth quarter after enjoying several quarters of growth. The declines reflect the rockiness of the quarter in the market overall,” Michael Shamrell, vice president of workplace thought leadership at Fidelity, told the news outlet. “The good thing is that savings behaviors remained consistent.”

More broadly, the average 401(k) balance declined 0.5 percent in the fourth quarter to $131,700, while the median balance was $30,700. IRAs saw similar trends, with average balances down 1 percent to $127,534 and a median balance of $11,053.

Employers played a role in encouraging saving, Fidelity noted, with many plans having auto-enrollment and automatic contribution escalation (though one study published by the National Bureau of Economic Research raises questions about how much they actually help).

Fidelity also found that in 2024, nearly 40 percent of retirement savers ramped up their contribution rate, with an average increase of 2.9 percent. The overall 401(k) savings rate, including employer contributions, rose to 14.1 percent – just shy of Fidelity’s recommended 15 percent target.

With pension availability declining and concerns over the long-term solvency of Social Security, including a dour projection that it would have to slash payouts by 2033, more workers are focused on building personal retirement savings. Fidelity found that 14.4 percent of Gen X savers made catch-up contributions in 2024, taking advantage of additional contribution allowances for those over 50.

“Overall we’re starting to see more and more people really understand the right steps to take—the long-term effort to put in and not reacting to short-term market conditions,” Shamrell said.