401(k), IRA millionaires hit record
Retirement savers are reaping the benefits of the stock market’s record run.
The number of investors with at least $1 million in their 401(k) accounts rose to an alltime high of 233,000 in the final three months of last year, according to Fidelity Investments’ quarterly analysis of retirement saving trends for its holders of 401(k) or IRA accounts.
The number of IRA millionaires also rose to a record 208,000 in the period.
The increases reflect some of the stock market’s strong gains at the end of 2019. The Dow Jones Industrial Average rose 6.7%, including dividends, during the fourth quarter, while the Standard & Poor’s 500 index climbed 9.1%.
Average account balances also set records.
The average 401(k) account balance reached $112,300 at the end of the fourth quarter, or the last three months of the year. That represented a 7% gain from the previous quarter’s balance of $105,200 and surpassed a record of $106,500 in the third quarter of 2018.
IRA contributions rise
The percentage of investors contributing to their IRAs rose, led by millennials.
Younger adults in that demographic contributed $373 million to IRAs in the fourth quarter, a 46% jump from a year ago with 73% of their contributions going into Roth IRAs.
The number of IRA accounts with a contribution rose 7% from a year ago, with the percentage of millennials contributing to an IRA rising 21% in that span.
Long-term savers cash in
For savers who have been participating in the same workplace 401(k) plan for a decade, the average balance reached a record $328,200 in the fourth quarter, topping a previous high of $306,500.
More employers pitch in
Another factor that’s helping boost retirement savings: employers. A record level of them (35%) auto-enrolled new workers into their company’s 401(k) plan in the fourth quarter.