401(k) millionaires rise 9.5% in Q3 at Fidelity amid stock market strength

On Thursday, Fidelity Investments released its Q3 2024 retirement analysis, revealing positive trends for retirement savers. The report highlighted a consistent quarter of growth, attributed to strong contribution levels and favorable market conditions. Notably, Gen X individuals have made significant progress with their retirement savings, evidenced by increased IRA contributions and a growing number of IRA accounts receiving contributions.

In terms of high-value retirement accounts, the number of 401(k) and IRA millionaires saw a rise. The count of individuals with at least $1 million in their 401(k) accounts grew by 9.5%, reaching 544,000, up from 497,000 in Q2. Similarly, IRA millionaires increased by nearly 5%, with the number climbing to 418,111 from 398,594, a testament to the benefits of starting early and maintaining consistent contributions over time.

Sharon Brovelli, President of Workplace Investing at Fidelity Investments, emphasized the importance of steadfastness in retirement contributions, regardless of market fluctuations. Brovelli stated, "Consistent retirement contributions during various market cycles is important, but maintaining this commitment in the long run is what will set Americans up for a future of financial wellness and security."

The total average 401(k) savings rate remained stable at 14.1%, a figure close to Fidelity's recommended savings rate of 15%, which includes both employee and employer contributions. The breakdown of the savings rate includes 9.4% from employee contributions and 4.7% from employer contributions.

Long-term savers also saw an uptick in their average balances for the third quarter. For example, Gen X savers who have been contributing to their plans for 15 years experienced a 6% increase from the previous quarter, with an average balance now standing at $586,100, up from $554,400.

The report also showed a 35% increase in total IRA contributions among Gen X savers compared to Q3 of the previous year, and a 23% increase in the number of Gen X IRA accounts that received contributions.

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Source: Investing.com