If you’re working a full-time 9-to-5 and contributing to a 401(k) plan, now might be a good time to check in and see what’s been happening with those automatic paycheck deductions.
According to a new report from Fidelity Investments, many Americans might be surprised to find that they’ve earned millionaire status.
Data from the retirement plan company released on Tuesday reveals that in Q4 of 2023, the number of 401(k) accounts with over $1 million increased 20% quarterly and 41% year-over-year, with an estimated 422,000 accounts falling in this range by the end of 2023.
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The average account balance for those who made 401(k) millionaire status by the end of 2023 was $1,551,300 in Q4.
“This past year ended on a high note for retirement savers,” Sharon Brovelli, president of Workplace Investing at Fidelity Investments, told CNN. “When it comes to matters like market stability and economic events, 2023 gave us the highs of the highs, and the lows of the lows but, encouragingly, many retirement savers took the long view and stayed the course through it all, which is the type of commitment that can lead to a secure financial future.”
The report also found that an estimated 37.2% of employees increased their 401(k) contribution percentage in 2023, with 78% of employees participating in 401(k) planning to contribute at a percentage high enough to match their employer’s full-match contribution.
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The report found that 27% of employees also actively increased their contributions to their 401(k) plans instead of relying on automatic increases or electing to leave their contribution amounts as is.
According to data by the Investment Company Institute, total U.S. retirement assets hit $35.7 trillion in Q3 of 2023, with retirement assets accounting for 32% of all financial assets in U.S. households as of September 2023.
