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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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.
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.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
457 Plan Contribution Limits for 2026Retirement plans There are higher 457 plan contribution limits in 2026. That's good news for state and local government employees.
-
Medicare Basics: 12 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2026SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $70,000 in 2025, and up to $72,000 in 2026.
-
Roth IRA Contribution Limits for 2026Roth IRAs Roth IRAs allow you to save for retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2026 limits and income-based phaseouts.
-
SIMPLE IRA Contribution Limits for 2026simple IRA For 2026, the SIMPLE IRA contribution limit rises to $17,000, with a $4,000 catch-up for those 50 and over, totaling $21,000.
-
457 Contribution Limits for 2024retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2026retirement plans The Roth 401(k) contribution limit for 2026 has increased, and workers who are 50 and older can save even more.
