Secrets of the 401(k) Millionaires

The bull market helped boost balances, but these workers also save more and avoid borrowing against their savings.

A single golden egg in a nest made from dollar bills isolated on white background.The single egg represents a single investment for the future, usually retirement or a college fund.
(Image credit: KaraGrubis)

The number of 401(k) accounts with a balance of $1 million or more rose to a record 168,000 in the second quarter, an increase of 41% from a year earlier, according to Fidelity Investments, the nation’s largest plan administrator. Although that’s only a small percentage of 401(k) participants, there were other positive developments. The average 401(k) account balance rose 6% from a year earlier, to $104,000, and the average balance in individual retirement plans, which allow workers to save even if they don’t have a workplace plan, rose to $106,900, up nearly 7%.

The bull market contributed to the growth, but it wasn’t the only factor, says Meghan Murphy, a vice president at Fidelity Investments. Contributions are up, too. The average savings rate, which includes employee savings and company matching funds, was recently 13%, up from 12.5% in 2008. The 401(k) millionaires save even more, says Murphy. The average savings rate for those workers is 17%, and some millionaires save up to 25%, she says. Other characteristics of 401(k) millionaires:

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

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.