Can You Guess What Percent Of People Have $1 Million In Their 401(k)? Hint: It's Under 10% And Lower Than You'd Think!

You've probably heard stories about 401(k) millionaires – people who've managed to save $1 million or more in their retirement accounts. And while those stories are inspiring, they can also feel slightly misleading. Yes, there are more 401(k) millionaires today than ever before, but here's the reality: they're still a very small group.

Depending on the source, the percentage of people with $1 million in their 401(k) hovers between 2% and 9.1%. Fidelity Investments reports that just 2% of their 401(k) participants have hit that milestone. Broader data, like that from Empower Personal Dashboard™, suggests the figure is slightly higher when you include IRAs and other savings, with 9.1% of retirement savers reaching millionaire status. Either way, the takeaway is the same – it's not common.

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Why $1 Million Is Still Rare

For most Americans, reaching $1 million in a 401(k) account is a significant challenge. It's not impossible, but it's also not the norm. In fact:

1. The Average Balance Is Much Lower

According to Fidelity, the average 401(k) balance was approximately $132,300 in late 2024. That's far from seven figures and highlights how much work it takes to cross the $1 million threshold.

2. The Math Is Against Most People

Building $1 million in retirement savings typically requires decades of consistent saving, an employer match and strong market performance. On average, 401(k) millionaires have been saving for 26 years or more and contribute at least 17% of their income, according to USA Today. 

3. Retirement Savings Gaps Persist

Many Americans are underprepared for retirement. Northwestern Mutual’s 2024 Planning & Progress Study found the average U.S. worker believes they'll need $1.5 million to retire comfortably, but most aren't on track to meet that goal.

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Factors Driving the Growth in 401(k) Millionaires

It's worth celebrating the rise in 401(k) millionaires, even if the numbers are small. Several factors are helping people hit this milestone:

• Stock Market Performance: The S&P 500 gained nearly 15% in the first half of 2024, significantly boosting account balances.

• Consistent Saving: Those who reach $1 million often start saving early and stuck with it.

• High Contribution Rates: Maxing out contributions and taking full advantage of employer matches has a compounding effect over time.

• Time in the Market: Most 401(k) millionaires stayed invested through market downturns, letting their accounts grow during recoveries.

The Big Picture: Most Aren't There Yet

It's easy to get caught up in the headlines about record numbers of 401(k) millionaires, but it's also crucial to remember that this group is the exception, not the rule. The majority of people have far less saved. The gap between those who've reached the milestone and those still working toward it highlights just how important it is to:

• Start saving early.

• Increase contributions whenever possible.

• Take advantage of employer matches.

• Stay invested for the long haul.

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Why a Financial Advisor Can Help

If you're feeling overwhelmed about retirement savings, you're not alone. A financial advisor can help you create a personalized plan, whether you're just starting to save or aiming to join the 401(k) millionaire ranks. They'll help you navigate everything from contribution strategies to market volatility so you can stay on track.

The bottom line? Hitting $1 million in your 401(k) isn't impossible, but it takes commitment, smart planning and time. Even if you're not there yet, every step you take today puts you closer to building the kind of retirement you deserve.

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