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Fidelity: Number of 401(K) Plan Millionaires Surges 41 Percent to New High

Fidelity: Number of 401(K) Plan Millionaires Surges 41 Percent to New High

Friday, 17 August 2018 05:08 PM

The number of Fidelity 401(k) accounts with a balance of $1 million or more reportedly jumped to 168,000 in the second quarter of 2018, up 41 percent from a year earlier.

"The stock market's performance over the past several years has definitely helped retirement savers, but now would be a good time for investors to take a moment and make sure they are doing their part to meet their retirement goals," Kevin Barry, president of workplace investing at Fidelity Investments, told CNBC in a statement.

About 3 in 10 savers increased their contribution rate during the last year, Fidelity found. The average 401(k) contribution rate is now 8.6 percent as of the second quarter, the highest percentage in almost 10 years and up from 8.5 percent last year — not including the employer match, CNBC explained.

More employees are putting enough away to get the company match, Fidelity said, particularly millennials, who know they likely will not be eligible for pensions or other types of guaranteed benefits many current retirees enjoy.

Average retirement savings balances are now in the six figures, according to Fidelity. The average 401(k) balance is $104,000, just shy of the all-time high balance of $104,300 from the end of 2017, while the average IRA balance is $106,900 as of the second quarter, Fidelity found.

And while the typical retirement message usually focuses on how much people should stash away from every paycheck, new research shows that working longer is the key to dramatically increasing retirement money — even if you go just a month longer than you had planned, Reuters reported.

Just those 30 days could increase a retiree’s standard of living every year during retirement by as much as if he or she had saved an extra 1 percent of pay each year for 10 years before quitting, according to a study from Stanford University economics professor John Shoven.

Add on a little more time and the effect compounds. Retiring at 66 instead of 62 increases a person’s standard of living by a third, according to the study.

Shoven tested the impact of working longer on a wide range of incomes and investment returns; assuming investment gains would match inflation. Regardless of variations, all people benefited from postponing retirement.

This surprising finding should entice people to try to work a few more months, no matter how fed up they are with the rat race.    

(Newsmax wire services contributed to this report).

© 2018 Newsmax Finance. All rights reserved.

   
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The number of Fidelity 401(k) accounts with a balance of $1 million or more reportedly jumped to 168,000 in the second quarter of 2018, up 41 percent from a year earlier.
fidelity, 401k, millionaires, high
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2018-08-17
Friday, 17 August 2018 05:08 PM
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