The average retirement saver with a seven-figure balance is 59 years old By Anne Tergesen Aug. 17, 2023 12:01 am ET A balance of $1 million or more puts savers in the top 1.64% of all Fidelity 401(k) accounts. Photo: Nina Westervelt for The Wall Street Journal The number of people with at least $1 million in their 401(k) accounts has grown about 25% so far this year. Some 378,000 retirement savers in Fidelity plans had seven-figure-plus balances as of June 30, up from 299,000 at the end of 2022. The number of IRA millionaires increased by a similar percentage to nearly 350,000 on June 30, the nation’s largest retirement-plan and individual retirement-account provider said. A balance of $1 million or more puts savers in the top 1.64% of all Fidelity 401(k) accounts. For IRA owners, it is the top 2.5%. Not surprisingly, the rise and fall of retirement-account millionaires closely track the stock market’s moves. This year’s increase in retirement-account millionaires coincides with the S&P 500’s 16.71% surge, including dividends, since Jan. 1. The Bloomberg U.S. Aggregate bond index, meanwhile, is up 0.31%. In 2022, both bonds and stocks tumbled, taking the number of Fidelity 401(k) millionaires down by 32%. Becoming a millionaire isn’t the sign of wealth it once was, thanks to inflation. But when it comes to saving for retirement, the milestone remains an aspirational target for many American workers, said Mike Shamrell, vice president at Fidelity. “We aren’t saying $1 million is the perfect target,” he said. Given rising costs and the need to make nest eggs last decades, many savers will need more. Despite this year’s turnaround, the number of people with retirement-account balances of at least $1 million hasn’t returned to its peak, which occurred in the final three months of 2021. The market hit highs soon after. At the end of 2021, 442,000 of the 401(k) accounts and 376,100 of the IRAs Fidelity administers held seven-figure-plus balances. But that likely understates the true number of millionaires at Fidelity because the firm doesn’t aggregate the IRA and 401(k) balances of customers who hold more than one such account. Nor does it generally know how much wealth clients hold elsewhere. Among the characteristics that distinguish 401(k) millionaires are high savings rates. On average, they save 17.2% of their pay. Their employers contribute another 9.3% to their retirement accounts, for a total savings rate of 26.5%, according to Fidelity. In contrast, baby boomers, born between 1946 and 1964, save 11.5%, on average. Their employers kick in an extra 5.1%, on average, for a total savings rate of 16.6%, according to Fidelity. The average age of the 401(k) millionaires is 59. They “are not people who found some hot stock and added it to their 401(k) and all of a sudden the balance hit $1 million,” said Shamrell. Fidelity reported that the average 401(k) account held $112,400 on June 30, up 8.1% from $103,900 at the end of December. The average IRA balance was $113,800, up from $104,000. Despite the volatility, many workers continue to save in their 401(k) accounts at relatively high rates. The average savings rate as of June 30 was 13.9% of pay, including employer contributions. That is close to the 15% annual savings rate Fidelity recommends.
%% SAD for some, the youngest group is the highest % of renters + credit card users. Dave Ramsey recommends 15%+ that's in a account you control+ no bonds.
For the Chinese, it is not 15% + but 45.9% +. However, they put most into real estate, Evergrande, Country Garden....
%% INteresting average ; 65% population urban\ rest rural with average $20.000 rural income. The latter may eat better + have better health, but that's an educated guess