401K Millionaires Are At An All-Time High!

posted by Jessi Minneci -

Fidelity is the largest administrator of retirement accounts, so their regular updates provide the best view of what's up with our 401k plans and retirement account savings generally. From Fidelity's latest report here are a few highlights that we can feel good about: 

  • Record high 401k millionaires 

  • 61% year over year increase in 401k millionaires! 

  • Greater percentage of earnings contributed to retirement plans 

There's a lot to like here. It's not surprising the record stock market performance until about a week ago set the stage for record millionaires but a 61% increase in a year is an exciting number. 

What's more is that the average savings increased from 8.4% to 8.6% for those who contribute to retirement plans. So, it's the win-win. 

Great performance of investments and more money being contributed on the front end. Hopefully the tax cuts will help spur additional increases in savings rates with the average American saving an additional 4% on their federal tax bill this year (4.1% for Floridians). It's not all great news however... 

For those who have an employer sponsored 401k plan...Only 52% are participating. That means that nearly half of those who have an incredible benefit to easily save, invest and grow money in a tax advantaged way (often with free money via an employer match) are making a horrible decision by ignoring their plan. If this is you or your kids you should take the time to take this seriously and engage. 

Even if you think you can't "afford" to contribute (I'd argue that you can't afford not to), try for at least a month to save 6%, or at a minimum the level of an employer match, and see how you fare. If you truly can't make ends meet - so be it - make adjustments, however I've yet to find someone who's tried this that couldn't make it work.  

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