Tags: Fidelity | millionaires | retirement | savings

Fidelity: US Millionaires Club Expands Select Membership

By    |   Friday, 30 January 2015 12:29 PM

Most people will never become millionaires, but the ranks of those with seven figures in their coffers keeps rising.

Fidelity Investments, the largest provider of 401(k) plans, reported 72,000 American workers had piled up $1 million or more in Fidelity retirement plans at the end of 2014. That’s nearly twice as many as two years earlier, and almost five times more than 10 years ago.


Saving is nothing new to many of Fidelity’s 401(k) plan millionaires. The company said the average age of those participants was almost 60 years old.


"The stock market in the past two years has really pushed people over that threshold," Jeanne Thompson, a vice president at Fidelity, told CNBC. "They're investing for growth. These 401(k) millionaires hold 72 percent equities or equity mutual funds on average, and only 12 percent of that is company stock."


Granted, those 72,000 millionaires are still a drop in the bucket at Fidelity, which has 13 million 401(k) plan participants in total. More than 50 percent of those millionaires had balances of $1 million to $1.25 million, 39 percent had $1.25 million to $2 million; and an elite 9 percent had more than $2 million in their accounts.


Meanwhile, the average 401(k) balance grew to a record high of $91,300 at Fidelity in 2014.


Fidelity's said many of its retirement plan millionaires shared some common habits: they tended to contribute at least 10 percent to 15 percent of their pay to their 401(k)’s, they contributed enough to take advantage of their company’s matching contributions, and they took advantage of “catch up” contributions.


In the broader category of Individual Retirement Account (IRA) holders, Fidelity reported the average IRA contribution in
2014 was $4,325, an increase of 2 percent year-over-year.

For employees in a Fidelity 401(k) plan for a decade or more,  the average balance was $248,000, up 11 percent year-over-year, the company said.


"A variety of economic conditions, such as lower unemployment and record-setting stock market performance, helped make 2014 a very good year for retirement savers,” said Jim MacDonald, president, Workplace Investing, Fidelity Investments. "However, it's important to remember to take a long-term approach to retirement savings, and not react to short-term market swings.”

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Most people will never become millionaires, but the ranks of those with seven figures in their coffers keeps rising. Fidelity Investments, the largest provider of 401(k) plans, reported 72,000 American workers had piled up $1 million or more in its retirement plans.
Fidelity, millionaires, retirement, savings
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2015-29-30
Friday, 30 January 2015 12:29 PM
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