The number of 401(k) accounts exceeding $1 million in balance continues to grow steadily.
Fidelity, one of the largest retirement plan providers in the U.S., announced on December 5 that as of the third quarter of 2024, there were 544,000 401(k) accounts with balances over $1 million. This marks a 9.5% increase from the previous quarter’s 497,000 accounts, representing approximately 2.3% of Fidelity’s 24 million total account holders.
The average balance of these retirement millionaires was $1.616 million, up slightly from $1.595 million in the previous quarter.
Generation X (ages 44–57) was found to have higher retirement account balances compared to other generations. Among Gen X participants who have been saving for over 15 years, the average balance reached $600,000, a 6% increase from the second quarter of 2024 and a 35% increase from the same period last year. This trend reflects Gen X’s efforts to boost savings as they approach retirement age.
Experts view the growth in retirement account balances as a positive sign for financial stability. However, they cautioned that polarization in retirement preparedness remains a significant issue. While the proportion of accounts with balances over $1 million is rising, a considerable number of accounts still have little to no savings.
According to Fidelity’s data, the median balance across all accounts stands at just $30,600. This indicates that more than half of Fidelity’s 24 million account holders have balances below $30,600. Experts attribute this disparity in part to younger individuals just starting to save for retirement, but also to insufficient savings among lower-income households.
Lower-income individuals, in particular, face challenges in growing their balances, often withdrawing from their 401(k) accounts early during financial emergencies. Early withdrawals before age 59.5 incur a 10% penalty and result in the loss of tax benefits from maintaining the account. As a result, the gap between those who consistently maintain their 401(k) accounts and those who withdraw early is expected to widen further.
BY WONHEE CHO [cho.wonhee@koreadaily.com]
