Aug 29, 2024 - Economy
Number of retirement millionaires hits record high
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The average 401(k) account balance, at $127,100, is still below its 2021 highs — but there are now half a million Americans with more than $1 million in their 401(k) accounts just at Fidelity alone.
Why it matters: It's a sign of how the wealthy benefit disproportionately from tax breaks on retirement savings.
Between the lines: Many Americans don't work full-time for employers who offer 401(k) plans or similar.
- Of those who do, most aren't able to save the maximum amount possible — this year, $23,000.
- Even fewer max out their contributions every year for decades on end, without withdrawing money for life's regular expenses.
- And even fewer still have the risk tolerance necessary to put all their retirement funds into the stock market, rather than a more standard mixture of stocks and bonds.
The bottom line: The kind of people who are able to accumulate a seven-figure sum in their 401(k) accounts are precisely the people who are rich enough not to need tax incentives to save for retirement.
- But they're the people who benefit the most from those incentives all the same.
