How Much is in Your 401(k)?

A record high number of 401(k) accounts contained US$1 million or more during the second quarter, according to a new data analysis by Fidelity Investments.

As of June 30, nearly half a million 401(k) accounts (497,000) had balances of $1 million or more, up 2.5% from the prior quarter, according to Fidelity’s analysis of 24 million 401(k) accounts across 26,000 employer-sponsored plans. The average balance hit $1.595,200 million, up from $1,581,000 at the end of March.

The number of individual retirement account (IRA) participants carrying balances of $1 million or more also hit a record high last quarter, jumping 6% from the first quarter to nearly 399,000.

The vast majority of 401(k) participants’ average savings rate was 14.2% of their income in the second quarter, on par with where it was in the prior quarter, Fidelity reported. The good news is that this savings rate is slightly under the 15% retirement experts typically recommend and reflects a combination of employee and employer match contributions, CNN said.

The average 401(k) balance rose to $127,100, up 1% from the first quarter, and up 13% from a year ago.

“Although increases were modest, retirement savers in the second quarter of 2024 benefited from the continued upswing of the previous quarter when contribution levels and average account balances reached record highs,” said Sharon Brovelli, Fidelity president of workplace investing Investments. “…This quarter, Americans leveraged positive market conditions to build upon their savings and further secure their financial future.”