IRA and 401(k) millionaires are staging a comeback, with the number of seven-figure retirement accounts at Fidelity Investments inching back toward a 2021 high.
The tally of such accounts rose by more than 12% in the second quarter to 727,104, according to an analysis released by Fidelity Thursday. That’s the highest since the first three months of 2022 and within striking distance of a record.
This year’s double-digit gains in the benchmark S&P 500 have helped swell retirement balances for a third quarter in a row following a plunge that tracked the stock market last year.
“The average tenure of our millionaire 401(k) savers is 26 years, showing that staying in-plan and continuing to invest over the long term can pay huge dividends over time, particularly during positive turns in the market,” said Michael Shamrell, vice president of thought leadership at Fidelity Workplace Investing.
And while younger savers haven’t had decades in the market to amass large balances, Fidelity data show that many borrowers used the federal student loan payment pause to funnel money into retirement accounts. Close to three-quarters of student loan borrowers put at least 5% of their pretax salaries into 401(k)s during the period when payments were paused. That compares with 63% before the pause.
The average 401(k) balance at Fidelity is $112,400