Fidelity’s most recent retirement analysis, across its more than 30 million accounts, showed an increase in the number of 401(k) millionaires, as well as a bounce back in account values from a dip in the first quarter of the year. By the halfway point of 2018, Fidelity tallied 168,000 401(k) clients with $1 million or more in assets, up 49,000 from the previous year. IRA holders with a similar amount of assets numbered 156,000 clients.
The increase in retirement account value can be attributed to a number of factors, particularly the stock market’s performance over the past few years, said Kevin Barry, president of workplace investing at Fidelity Investments. Another contributing factor is a drop in the percentage of employees with 401(k) loans, to 20.5 percent, it’s lowest since the middle of 2009.
Young investors are making gains, according to Fidelity’s compilation. The average IRA balance for millennials, those born between 1981 and 1997, increased to $15,150 with a 19 percent increase in participation rate from the year prior. Seventy-five percent of those IRA accounts receiving contributions were Roth IRAs.
Although women made up 46.8 percent of the total workforce as recently as 2015, a number the Bureau of Labor Statistics predicted to grow to 47.2 percent by 2024, they’re still underrepresented in retirement funding. Just 21 percent of 401(k) millionaires and 26 percent of IRA millionaires were women, according to the report.
The midyear stats also showed that auto-enrolling has gained in popularity over the past decade. In 2008, just 15 percent of plans auto-enrolled employees, a figure that is now at 33 percent. “Auto enrollment positioned an entire generation of workers to build their retirement nest eggs,” said Barry.
