Credit: Pexels
More Americans are reaching millionaire status in their retirement accounts by following simple, long-term investment strategies.
A record number of Americans have reached 401(K) millionaire status, proving that consistent saving and smart investing can pay off in a big way. According to new data from Fidelity, 544,000 people have crossed the $1 million mark in their retirement accounts—a 9.5% increase from the previous quarter.
That’s not all. The number of IRA millionaires also surged by nearly 5% to 418,111, showing that both employer-sponsored plans and individual retirement accounts can be powerful tools for building wealth over time.
What’s Behind This Retirement Boom?
The spike in retirement savings isn’t just luck. The key factors? Consistent contributions, early investing, and a strong stock market.
The S&P 500 soared over 20% for the second consecutive year, giving retirement accounts a significant boost. But market growth alone doesn’t create millionaires—steady contributions over decades make the biggest difference.
Financial experts say those who reach 401(K) millionaire status typically:
- Start saving early—even small contributions in your 20s can grow significantly over time.
- Maximize employer matches—many companies offer a match on your 401(K) contributions, which is essentially free money.
- Increase contributions gradually—boosting savings by even 1-2% per year can lead to massive long-term growth.
- Stay invested for the long haul—avoiding early withdrawals helps your money grow through compound interest.
How Much Do Most People Have Saved?
While hitting $1 million is an exciting milestone, the average 401(K) balance is much lower. Across all age groups, the typical balance is $132,300, with those aged 65-69 having the highest average at $252,800.
Many Americans still struggle to save, with daily expenses, mortgages, and childcare costs making it tough to put money aside. In fact, a 2024 AARP study found that 20% of Americans over 50 have no retirement savings at all.
You Don’t Need a Six-Figure Salary to Become a Millionaire
Think reaching $1 million is out of reach? Think again. Many 401(K) millionaires never earned six-figure salaries but followed smart saving strategies.
Take Caroline Eby, a finance worker in her late 50s. Despite never making more than $80,000 a year, she is now close to hitting $1 million in her retirement savings.
Her strategy:
- Started saving at 25, even when making just $22,000 a year.
- Gradually increased contributions, eventually reaching 12% of her salary.
- Stayed consistent and never stopped investing.
“I’m so happy and proud of myself for the sacrifices I made 30 years ago,” she told DailyMail.com. “Like everyone told me, slow and steady wins the race.”
How You Can Grow Your 401(K) Faster
Want to build a bigger retirement nest egg? Here’s how to get on the path to 401(K) millionaire status:
- Max Out Employer Matches – If your company offers a 401(K) match, contribute enough to get the full match. Otherwise, you’re leaving free money on the table.
- Start Early, but Start Now – Even if you’re in your 30s, 40s, or beyond, it’s never too late to ramp up your savings.
- Let Compound Interest Work for You – If you invest $420 per month starting at age 25, and earn a 7% return, you’ll have over $1 million by 65.
- Avoid Early Withdrawals – Taking money out of your 401(K) before retirement can trigger penalties and stunt your savings growth.
- Keep a Diversified Portfolio – A mix of stocks, bonds, and other assets can help balance risk as you get closer to retirement.
The Bottom Line
Reaching $1 million in your retirement savings may seem like a big goal, but with consistent saving, smart investing, and time on your side, it’s achievable.
If you’re unsure about your investment strategy, consider speaking with a financial advisor to create a plan that fits your goals.
