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Number of Fidelity 401(k) millionaires hits record high

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Number of Fidelity 401(k) millionaires hits record high

 
Old 08-16-2018, 10:31 AM
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Default Number of Fidelity 401(k) millionaires hits record high

Number of Fidelity 401(k) millionaires hits record high



A record number of investors became 401(k) millionaires this spring.

At the end of the second quarter, 168,000 people with 401(k)s managed by Fidelity Investments had at least $1 million in their accounts, a rise of 50,000 people from a year earlier when there were 118,000, according to a new study by Fidelity, one of the nation's largest administrators of workplace retirement accounts. While gaining, that exclusive group of savers is still just a fraction of the 16.1 million people who have a 401(k) account managed by the fund company.

Building a million bucks-sized nest egg doesn't happen overnight and is a result of workers who invest for the long term and put a chunk of their savings into stocks.

"Individuals are increasing their savings rates, they're taking advantage of their company match and they're keeping a healthy percentage of stocks in their account," says Jeanne Thompson, senior vice president at Fidelity Investments. "It takes many years of consistent saving and investing, but following these steps as part of a long-term retirement strategy can put an individual in a good position to eventually reach this savings milestone."

The broad U.S. stock market, which has been in a bull market for more than nine years, is up about 5 percent this year after posting a nearly 20 percent gain in 2017.

An additional 7,667 Fidelity IRA customers clocked in with $1 million-plus account balances in the April-thru-June quarter, boosting the number of individual retirement account millionaireNews of the swelling ranks of 401(k) and IRA millionaires comes at a time when many Amerans worry that they are not saving enough or some who aren't saving at all.

For the 2018 tax year, workers younger than age 50 can set aside up to $18,500 of their salary in 401(k) plans, while employers 50 and older can contribute an additional $6,000 in catch-up savings.

Here are other highlights from Fidelity's quarterly analysis of retirement savings trends:

Average balances rise

The average 401(k) balance at the end of June was $104,000, up 6.4 percent from last year's second quarter, but below the record $104,300 balance from the final quarter of 2017. The average IRA balance jumped nearly 7 percent to $106,900.

Borrowing from 401(k) drops

Fewer workers are using their 401(k) as a bank. The percentage of employees with an outstanding 401(k) loan dropped to 20.5 percent, the lowest since 2009. Better yet, the percentage of new loans taken out dropped for the second straight quarter.

'Auto enrollment' gains

The number of employers automatically enrolling new workers in 401(k) plans rose, helping to boost positive investment outcomes. Among large employers with 50,000-plus workers, 61 percent now sign their employees up automatically.

Employees that are automatically put into the savings plan tend to stay invested in the 401(k) plan longer and they tend to save more. Average plan participation rates in the second quarter hit 87 percent for workers automatically enrolled, versus just 52 percent for those in plans without automatic sign-up.

Since 2008, the average savings rate of employees automatically put into a plan has increased to 6.7 percent of their salary, up from 4 percent, the study found.

https://www.usatoday.com/story/money...rd/1000228002/
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Old 08-16-2018, 10:35 AM
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And when there’s the inevitable 20% correction those same newbies will be cramping their pants.
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Old 08-16-2018, 10:42 AM
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Originally Posted by Frankie the Fink View Post
And when there’s the inevitable 20% correction those same newbies will be cramping their pants.
Not necessarily. Most of us are in for the long term because we know that no correction lasts very long. Those that sell lose.
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Old 08-16-2018, 10:44 AM
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Originally Posted by SouthernSon View Post
Not necessarily. Most of us are in for the long term because we know that no correction lasts very long. Those that sell lose.
Yep. Ignore the day to day stuff and keep focus on long term.
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Old 08-16-2018, 10:45 AM
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There's even more if they count other institutions like Vanguard.
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Old 08-16-2018, 10:54 AM
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I'm a 1/2 millionaire, damn that doesn't sound impressive at all...
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Old 08-16-2018, 10:57 AM
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Epic transfer of wealth , buy boomer 55 plus realestate property in florida, ariz,nc, sc, texas- the tidal wave of spending tsunami is here . bomers are doing a reset

10K PEOPLE A DAY CROSS THE 1M net worth THRESHOLD EVERYDAY IN AMERICA that began back in 2008 and will continue until about least 2030

Harry s. dent and his co author has the numbers- read his books, he's right more than1/2 of the time on demographic s and time line forecasting- some of his predictions were *** backwards but most were spot on the money

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Old 08-16-2018, 10:59 AM
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Think how many there'd be if we could put another 12.6% of gross into our 401(k)s....
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Old 08-16-2018, 11:02 AM
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Originally Posted by DB Cooper View Post
Think how many there'd be if we could put another 12.6% of gross into our 401(k)s....
And double the amounts for a Roth.
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Old 08-16-2018, 11:04 AM
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I wonder how many of those millionaires are dems, then I wonder if they will vote to undo all the changes President Trump has done to help them become millionaires.....HMMM????

We already know a lot of them hate President Trump more than they love their country, however it will be interesting to see if they hate President Trump more than they love their money. When it comes to elections MONEY TALKS AND BULLSHIT WALKS.
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Old 08-16-2018, 11:14 AM
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Honestly.......the number DRAMATICALLY understates wealth held across the country by individuals.

Most people no longer stay in that SAME job over the length of a career and they save/invest in taxable accounts as well. The positive "change" is nice to see but as a people, Americans, we are doing far better than this.
It's the TREND you have to like........but the actual number of Americans doing this well is dramatically UNDERSTATED in this Fidelity survey.

In this forum alone I could ask, "who here has all or most of their money in a standard 401k?"

Many Americans may have a sizable chunk of the over all pie in their company 401k plan, especially if they are among those who've actually worked for a long time in that same job, but most also have IRAs as well, roll-over situations from previous employment, Roth IRAs for those who qualify and even re-characterizations for those who make too much yearly to contribute.......and then the regular brokerage and savings accounts. A truer picture of how the average American Family is doing today really needs to take into account far more than just 401k plans alone.

A Million dollars still is that nice round number people shoot for early on and it's still a milestone when they reach it for the first time..........but it's not what it used to be in terms of actual "WEALTH".........there are a lot of Americans living pretty standard lifestyle today with far more that $1,000,000 in liquid wealth. Many, many more than these Fidelity figures suggest.

Last edited by Krystal; 08-16-2018 at 11:19 AM.
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Old 08-16-2018, 11:16 AM
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Originally Posted by Roothog69 View Post
I'm a 1/2 millionaire, damn that doesn't sound impressive at all...
Depends on your age.

It is if you're under 30.........if your 40 you got work to do and more planing........if your over 50........then you're behind your peers in the pursuit of "comfortable".
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Old 08-16-2018, 11:19 AM
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Wow, that seems really low to me.

I guess the majority of people saving for retirement don't have Fidelity accounts? My work 401 isn't Fidelity.
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Old 08-16-2018, 11:32 AM
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Originally Posted by Krystal View Post
Honestly.......the number DRAMATICALLY understates wealth held across the country by individuals.

Most people no longer stay in that SAME job over the length of a career and they save/invest in taxable accounts as well. The positive "change" is nice to see but as a people, Americans, we are doing far better than this.
It's the TREND you have to like........but the actual number of Americans doing this well is dramatically UNDERSTATED in this Fidelity survey.

In this forum alone I could ask, "who here has all or most of their money in a standard 401k?"

Many Americans may have a sizable chunk of the over all pie in their company 401k plan, especially if they are among those who've actually worked for a long time in that same job, but most also have IRAs as well, roll-over situations from previous employment, Roth IRAs for those who qualify and even re-characterizations for those who make too much yearly to contribute.......and then the regular brokerage and savings accounts. A truer picture of how the average American Family is doing today really needs to take into account far more than just 401k plans alone.

A Million dollars still is that nice round number people shoot for early on and it's still a milestone when they reach it for the first time..........but it's not what it used to be in terms of actual "WEALTH".........there are a lot of Americans living pretty standard lifestyle today with far more that $1,000,000 in liquid wealth. Many, many more than these Fidelity figures suggest.
The percentage of individuals with a net worth of 1 million is around 3-4%, and households is about 10%.

Have to keep in mind that $1,000,000 represents TWENTY YEARS of average household income before taxes.
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Old 08-16-2018, 11:34 AM
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Originally Posted by pdiddy972 View Post


The percentage of individuals with a net worth of 1 million is around 3-4%, and households is about 10%.

Have to keep in mind that $1,000,000 represents TWENTY YEARS of average household income before taxes.
How is "net worth" calculated? I think that vary's widely as well.
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Old 08-16-2018, 11:36 AM
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Originally Posted by pdiddy972 View Post


The percentage of individuals with a net worth of 1 million is around 3-4%, and households is about 10%.

Have to keep in mind that $1,000,000 represents TWENTY YEARS of average household income before taxes.
link
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Old 08-16-2018, 11:36 AM
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Originally Posted by Chevy Guy View Post
Wow, that seems really low to me.

I guess the majority of people saving for retirement don't have Fidelity accounts? My work 401 isn't Fidelity.
I think the trend is what you should really take from it.

I agree the figures are nearly meaningless.......almost misleading entirely . It makes that $1,000,000 target level look far more elusive that it actually is. To get perspective.......I'd like to see the average age of a fidelity 401k account. Over a working life where I had access to a 401k or the non profit equivalent 403b........I never accumulated more than $200,000 in any one of them. Mostly due to the fact that the longest I ever worked for one employer was 6 years. I always rolled 'em over to an IRA at my first opportunity as I'm sure most people do it.

The thing I take from the 168.000 million dollar plus accounts is how it gives a view of how many people probably do still work most of their career with one employer. Given yearly contribution limits.......a Million socked away in this one account does require more than just a few years. Unless you are a KICK-*** good fund picker with luck to match a Million would take most people a bare minimum of 15 years to accumulate and for most folks it would take longer especially if they can't make the maximum contribution allowed each year.
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Old 08-16-2018, 11:39 AM
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having a net worth of a million used to be something to crow about, those days have since passed
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Old 08-16-2018, 11:46 AM
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Democrats are thinking "We could buy a lot of votes with that money!"
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Old 08-16-2018, 11:48 AM
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Originally Posted by 1%r View Post
having a net worth of a million used to be something to crow about, those days have since passed
It was a good goal I set in the past but I sure wouldn't use it today.
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