There's a New Record Number of Retirement Millionaires: What You Need to Know
In the second quarter of 2025, Americans’ retirement accounts hit new heights. Fidelity Investments reports that the number of people with $1 million or more in their 401(k) plans reached an all-time high of roughly 595,000. At the same time, average balances across 401(k), 403(b), and IRA accounts also rose to record levels.
Key Figures
- The average 401(k) balance reached about $137,800, up significantly from a year earlier.
- 403(b) plans averaged approximately $125,400.
- Average IRA balances rose too, hitting $131,366.
- Among the millionaires, the median balance is about $1.4 million.
What’s Fueling the Growth
Several factors combined to push retirement balances up:
1. Strong Stock Market Performance
The S&P 500, among other major indices, had a solid second quarter. Broad market gains contribute directly to higher account valuations for those invested in equities or equity-funds.
2. Consistent Contributions Over Time
Many of the new millionaire accounts are held by savers who have been contributing steadily for decades, weathering multiple downturns, recessions, and market volatility. The disciplined savings habit, compounded over time, has been a major driver.
3. Relatively Strong Savings Rates
The average total contribution rate (employee + employer) in many of these plans is near 14.2%. While that isn’t far above many past benchmarks, it reflects both individual saving discipline and employer matching contributions in many cases.
4. Time in the Market, Not Timing
The data suggest the most successful savers didn’t get rich by perfectly timing market highs and lows. Rather, they stayed in the market, kept investing during good times and lean times, avoided excessive trading or emotional adjustments, and benefited from compounding.
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Generational Differences & What This Means
The millionaire‐401(k) group is dominated by Gen X and Baby Boomers, with few Millennials or younger people making up that club so far. That makes sense, given how long it takes to accumulate wealth in retirement accounts.
Average balances vary a lot with age. For instance, Boomers (older generation nearing or in retirement) have much higher average balances than younger savers.
Risks / Caveats to Keep in Mind
While the numbers are encouraging, they don’t tell the full story:
Median vs Average
Averages can be pulled up by high balances among relatively fewer people. Many savers still have much smaller balances. For many, current balances may still fall short of what’s needed for a comfortable retirement.
Market Volatility
Gains depend heavily on continued market performance. A strong quarter can mask underlying risks, and downturns could impact many savers especially those close to retirement.
Contribution Constraints
Not everyone has access to employer contributions or high enough income to save aggressively. Also, loans or withdrawals from retirement accounts can erode growth.
Lessons and Takeaways
For people still building their retirement nest egg, the recent trends offer some useful lessons:
- Start early, stay invested: The power of compounding over extended periods is evident in the millionaire cohort.
- Consistent saving: Maintaining a steady savings rate (with the help of employer matches where possible) matters more than trying to beat the market.
- Resist knee-jerk reactions: Markets will go up and down; staying the course tends to yield strong results over decades.
- Plan according to age: Adjust investment mix, contribution levels, risk tolerance as one gets closer to retirement.
In sum, the record levels of 401(k) and IRA millionaires are a testament to disciplined saving, favorable market returns, and time. For many Americans, the path to retirement success remains less about flashy moves and more about steady, long-term habits. If you’re not among the millionaires yet, the recent data show that the building blocks are pretty well known, and very possible to put into practice.
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Disclaimer
The views, information, or opinions expressed in the above article are solely those of the author and do not necessarily represent those of any affiliated organizations, institutions, or entities. The article is meant for informational purposes only and should not be considered as professional investment advice. Past performance is not indicative of future results. The stock market is inherently risky, and investors may lose part or all of their investment. The author does not guarantee the accuracy, completeness, or timeliness of the information provided. Any reliance you place on such information is strictly at your own risk. This article contains forward-looking statements and projections that are based on current expectations, estimates, and projections about the stock market and the overall economic environment. These statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. The author is not a licensed financial advisor, and this article should not be construed as a recommendation to buy, sell, or hold any investment or security. Before making any investment decisions, readers should consult with a qualified financial advisor to discuss their individual situation and risk tolerance. The author may hold positions in some of the stocks or financial instruments mentioned in this article. However, this does not influence the objectivity of the content presented. This article is protected by copyright laws and may not be reproduced, distributed, transmitted, displayed, published, or broadcast without the prior written permission of the author. By reading this article, you acknowledge that you have read and understood this disclaimer and agree to hold the author and any affiliated parties harmless from any losses, damages, or consequences resulting from the use of information contained within.
