How One Woman Became a 401(k) Millionaire

Saving early and implementing a smart investing strategy helped Alison Sowell make big gains over time.

(Image credit: Ian Tuttle)

The number of investors with at least $1 million in their 401(k)s reached a record 233,000 in late 2019, and IRA millionaires totaled 208,000, according to Fidelity Investments, which tracks 30 million retirement plans. Thanks to an early start on saving and a disciplined strategy, Alison Sowell, 51, is a proud member of the club, with more than $1 million saved for retirement through her contributions to workplace plans. Last year, she was recognized by Jackson, Grant Investment Advisers as a “401(k) Champion” for her diligence.

Sowell, who lives in San Jose, Calif., began her journey to millionaire status when she was 16 years old. She worked for Nordstrom, and her manager convinced her to set aside some of her earnings in the company’s 401(k) and profit-sharing plan. “He said, ‘Imagine writing yourself today a future check for $1 million when you retire,’ ” says Sowell, who is now a senior executive administrator for a technology company.

Sowell is living proof that a setback doesn’t have to derail your long-term plan. When she left her job at Nordstrom after 10 years, she cashed out about one-fourth of her savings in the retirement account to pay off credit card debt. “In the long run, I think I did myself a disservice. I lost out on some money that I was going to use to pay debt because of taxes and penalties, and I lost out on the future earning power of that money in the stock market,” she says.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

But she has always made the maximum allowable contribution to her 401(k), wherever she has worked. And now that she’s older than 50, she’s putting in catch-up contributions, too. “Finally seeing my balance go over the $1 million mark was a really good feeling. I probably won’t retire anytime soon, but if I do need to retire early, I have some money to draw on that is well invested and should last,” she says.

Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.