The number of 401(k) millionaires at Fidelity increased 27% over the course of 2024, while the average end-of-year 401(k) balance ranks as the second-highest on record and reveals an 11% increase from the start of 2024.
The statistics showing the positive growth in 2024 come from Fidelity Investments’ Q4 2024 retirement analysis, released by the Boston-based recordkeeper this morning. Fidelity’s quarterly analysis of savings behaviors and account balances covers more than 50 million IRA, 401(k), and 403(b) retirement accounts.
“Retirement savers experienced several quarters in a row of upward growth, with account balances making significant gains over the course of 2024,” said Sharon Brovelli, president of Workplace Investing at Fidelity Investments. “We are pleased to see so many individuals begin 2025 with a strong financial foundation and the savings behaviors in place that will help them better navigate what may come in the year ahead.”
As for the 401(k) millionaire ranks at Fidelity—defined as having over $1 million in their 401(k) recordkept by Fidelity—the total stood at 537,000 at the end of 2024, up from 422,000 at the beginning of last year (but down from 544,000 in Q3 2024). The number of IRA-created millionaires grew 8% over the year (344,413 vs. 318,863). Fidelity noted that buoyed by market gains, these individuals are able to reach this level of retirement savings by starting early and contributing consistently over many years.
Over the course of 2024, the Nasdaq Composite grew by 30%, the S&P 500 by 24% and the blue-chip Dow Jones rose by a more modest 13% to help more savers crack the million-dollar mark.
It’s no surprise that most 401(k) millionaires are Gen Xers or Boomers. On average, Fidelity has previously said they have been saving for about 26 years and contribute more than 17% of pre-tax income to their retirement accounts.
Over at the federal government’s Thrift Savings Plan, it was reported in January that 157,760 participants had account balances topping $1 million, an increase of about 40,000 from the previous year’s total (116,827).
Average 401(k) up 11% last year
Fidelity’s latest analysis of savings behaviors and account balances for more than 50 million IRA, 401(k), and 403(b) retirement accounts can be found here.
The data shows that the average 401(k) balance at Fidelity finished 2024 at $131,700, which is down 0.5% from Q3 2024 ($132,300) but is up 11% from the beginning of 2024. The average is up 44% over the past decade.
For comparison, Bank of America recently reported that the average 401(k) account balance for their recordkept accounts at year-end 2024 was $100,300, up 16% from the beginning of last year.
Today’s Fidelity report shows the total average 401(k) savings rate remained steady in Q4 2024 at 14.1%, up slightly from a year prior, when it was 13.9%. Driven by employee and employer contributions (9.4% and 4.7%), the savings rate continues to be very close to Fidelity’s suggested savings rate of 15%. More good news? Nearly 40% of retirement savers increased their contribution rate in 2024 with an average increase of 2.9%. Additionally, the new report said nearly 90% of savers overall received a contribution from their employer.
Long-term savers saw a significant boost in savings in 2024. Gen X 15-year savers saw an 18% increase in their average balances from a year ago ($589,400, up from $508,000).
“As we have for several quarters now, we observed upward savings trends in Q4. This is encouraging news and is particularly important for many Gen X savers, who are able to make catch-up contributions,” said Roger Stiles, Head of Fidelity Wealth. “This is an important consideration as the April tax deadline approaches where investors may be able to contribute to an IRA for potential tax deductions for 2024.”
IRA and 403(b) balances
As for those IRA balances, the average at the end of 2024 was $127,534, down 1% from Q3 2024 but up 8% from the start of 2024.
Meanwhile, the average 403(b) account balance at Fidelity was $117,800, also down 1% from Q3 2024 but up 11% over the course of the year.
Defining retirement differently
This quarter’s retirement analysis also places a spotlight on the shift in how Americans are defining retirement. According to new Fidelity research, 63% of employers report a workforce with at least 30% of employees over the age of 50. Fidelity published two research papers that explore this evolution and what it means for the workplace: Rethinking Retirement looks at how an aging workforce is leading employers to reevaluate retirement transition strategies, while Is Retirement Retiring? looks at the shift in employees working past the age of 65 and highlights how offering supportive benefits can be advantageous to employees and employers.
Fidelity reported assets under administration of $15.1 trillion, including discretionary assets of $5.9 trillion as of December 31, 2024.
SEE ALSO:
• Participant Pulse: 401(k) Balances at BofA Grow 16% in 2024
• Record High Number of 401(k) Millionaires, Average Account Balances at Fidelity
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
