401(k) Millionaires Rise by 9.5% at Fidelity in Q3 Amid Strong Stock Market Performance

Fidelity Investments published its 2024 Q3 retirement analysis on Thursday, revealing positive trends for retirement savers. The report highlighted a stable growth quarter attributed to strong contribution levels and favorable market conditions. Particularly, Generation X individuals made significant progress in retirement savings, as evidenced by increased IRA contributions and a rise in the number of contributing IRA accounts.

There was an increase in the number of high-value retirement accounts, with growth observed in both 401(k) and IRA millionaires. The number of individuals with at least $1 million in their 401(k) accounts rose by 9.5%, from 497,000 in the second quarter to 544,000. Similarly, IRA millionaires increased by approximately 5%, from 398,594 to 418,111. This increase serves as evidence of the benefits of starting early and making consistent contributions over time.

Sharon Brovelli, Head of Workplace Investments at Fidelity Investments, emphasized the importance of maintaining consistent retirement contributions regardless of market volatility. Brovelli stated, "Consistent retirement contributions are important through various market cycles, but sustaining that commitment over the long term is what will prepare Americans for a future filled with financial well-being and security."

The overall average 401(k) savings rate remained stable at 14.1%. This figure is close to Fidelity's recommended savings rate of 15%, which includes both employee and employer contributions. The breakdown of the savings rate consisted of 9.4% from employee contributions and 4.7% from employer contributions.

Long-term savers also experienced an increase in their average balances during the third quarter. For instance, Generation X savers who have contributed to their plans for 15 years saw their average balance rise from $554,400 to $586,100, reflecting a 6% increase compared to the previous quarter.

The report further indicated a 35% increase in total IRA contributions among Generation X savers compared to Q3 of the previous year, as well as a 23% rise in the number of contributing Generation X IRA accounts.