Record number of 401(k) millionaires in the US as stock market rallies

According to Fidelity Investments, the number of 401(k) accounts with balances of at least $1 million reached a record 769,000 in the second quarter, marking a 19% increase from the first quarter. This growth is attributed to a bullish stock market and record-high employee contribution rates. Despite this milestone, these million-dollar accounts represent only about 3% of the 25.8 million accounts managed by Fidelity.

Michael Shamrell, vice president of thought leadership at Fidelity, emphasized that these results are the product of decades of consistent saving and disciplined financial behavior. He noted that Fidelity focuses on the "how" of reaching these goals rather than the $1 million figure itself, as retirement needs vary significantly by individual. Despite economic pressures such as inflation and rising living costs, the average 401(k) contribution rate remained at a record 9.6% in the second quarter.

The S&P 500's 15% gain in the three months ending June 30 played a significant role in boosting these account balances. However, these figures do not necessarily translate to widespread confidence in retirement prospects. A survey by NFP found that 72% of workers feel they are lagging behind on their retirement savings, with the average Fidelity 401(k) balance standing at $155,800.

Shamrell noted that while concerns regarding inflation and geopolitical tensions persist, about one-third of those surveyed expressed positive feelings about their personal financial situation, which may be linked to the positive trends in their retirement savings.