401(k) millionaires reaches record high: Fidelity

Remember this rule:

 

it's a double-edged sword. great for the haves invested in the market, not so much for the have nots.

stock prices at record highs largely due to corporate profits surging due to greedflation.

 

When Republicans ask the question "are better off now than you were four years ago" a lot of those 401(k) millionaires will answer in the affirmative as a will significant percentage those persons whose retirement plans (401(k)s and IRAs) who haven't reached that level yet but are much closer than they were when Trump left office.

 

Yes, but this is a small percentage of Americans. IRAs and 401Ks combined is around 900,000 accounts. Assuming no overlap, which there will certainly be, that represents 3/10s of 1% of Americans. 61% of Americans own stock and it is disproportionately concentrated with the wealthiest Americans. So yes, some are better off than four years ago. Far better off. Those that have little to no equities at best treaded water.

 

According to this source 70 million actively employed Americans have 401(k) accounts. Maybe the 900,000 is the number of plans (for 401(k)s it was 710,000 plans at the end of 2023) rather than the number of participants considering that numerous employers use companies like Fidelity and Vanguard to administer the accounts of their employees.
401(k) Resource Center
401(k) plans hold $7.4 trillion in assets as of December 31, 2023, in more than 710,000 plans, on behalf of about 70 million active participants and millions of former employees and retirees. Savings rolled over from 401(k)s and other employer-sponsored retirement plans also account for about half of the $13.6 trillion held in individual retirement account (IRA) assets as of December 31, 2023.

 

Thanks Joe and Kamala!

 

There's been haves and have nots since the beginning of time and there will be forever. Reality of life. Work hard and more importantly make good decisions so you can be a have. Plus, the haves still supply the have nots with employment. To quote a wise man, "the world needs ditcheiggers, too."

 

900,000 are the millionaire accounts, not total accounts. There’s definitely not 70 million accounts with $1M+.

FYI, the total $13.6T averages to under $200,000 per participant. It’s difficult to translate traditional equity to these retirement plans with their investment caps per year but this illustrates the wealth disparity which obviously matters when talking about stock market gains: “As of 2021, the top 10 percent of Americans owned an average of $969,000 in stocks. The next 40 percent owned $132,000 on average. For the bottom half of families, it was just under $54,000.” I think its fair to assume a similar distribution though not as extreme for retirement accounts.

What Percent Of Americans Own Stocks?

 

The chasm is widening, it is what leads to social unrest when the middle class gets squeezed out and the have not begin to greatly outnumber the haves. To quote someone else "Let them eat cake" only works so long.

 

I thought that you were referring to total 401(k) accounts rather than 401(k) millionaires. In any event the value of the average 401(k) increased significantly over the last four years.

 

And the number will go up regardless of who the next president is

 

I agree they have increased, but that wasn’t my point. The problem is that 40% are not even in the market so they haven’t seen any of that increase. And of the people in the market the majority is concentrated in the top 10% and the next 40% taking the lion’s share of remaining amounts. It’s a widening disparity that will not end well, IMO.

 

sigh.

 

They posted in the second response.

 

On the flipside, I think it's a reasonable assumption that there are also people out there who have multiple accounts that add up to more than $1M, and are not counted here. Just one of the limitations of using raw account stats from the financial providers.

It's fairly unusual in this day and age for someone to stay in one place for enough years to build up a single 7 figure account. Plenty of people leave those accounts with a prior employer rather than consolidating into a rollover IRA or current 401k provider. Heck, my wife has 3 out there that I keep procrastinating rolling together. Maybe I'll start that paperwork tomorrow, or the day after...

 

Sorry much of the gains have been in tech. That’s based on great earnings and the current and expected spend on AI among other things.

Consumer staples has been a small part of the run up, that’s where you would see “greed-flation”.

 

and others who have had big gains will say no...reality is not a consideration to some