If you work a full-time 9 to 5 and contribute to a 401(k) plan, now might be a good time to check in and see what’s going on with those automatic paycheck deductions.
According to a new report from Fidelity Investments, many Americans may be surprised to discover that they have earned millionaire status.
Retirement plan company data released Tuesday reveals that in the fourth quarter of 2023, the number of 401(k) accounts with more than $1 million increased 20% quarter-over-quarter and 41% year-over-year, to about 422,000 accounts that fall within this range by the end of 2023.
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The average account balance for those who reached 401(k) millionaire status by the end of 2023 was $1,551,300 in the fourth quarter.
“Last year ended well for retirement savers,” said Sharon Brovelli, president of Workplace Investing at Fidelity Investments. CNN. “When it comes to issues such as market stability and economic events, 2023 has given us the highest of highs and the lowest of lows but, encouragingly, many pension savers have taken a long-term view and stayed the course despite everything, which is the kind of commitment that can lead to a secure financial future.”
The report also found that approximately 37.2% of employees increased their 401(k) contribution percentage in 2023, with 78% of 401(k) participating employees planning to contribute a percentage high enough to match your employer’s full contribution.
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The report found that 27% of employees also actively increased their contributions to 401(k) plans instead of relying on automatic increases or choosing to leave contribution amounts unchanged.
According to data from the Investment Company Institute, total U.S. retirement assets reached $35.7 trillion in the third quarter of 2023, with retirement assets accounting for 32% of all U.S. household financial assets as of September 2023 .