Millennials Joining the Millionaire Club? Fidelity's New Survey Reveals Retirement Savings Trends

Fidelity Investments reported that the number of 401(k) millionaires—those with account balances of $1 million or more—reached a record high of 654,000 in September, up from 595,000 at the end of June. This surge reflects the strong performance of U.S. markets, with the S&P 500 (^GSPC) rising 8.1%, the Nasdaq Composite (^IXIC) gaining 11.2%, and the small-cap Russell 2000 (^RUT) climbing 12.4% over the same period.

The driving force behind this milestone? Millennials—those aged 29 to 44—are increasingly joining the ranks of retirement savers with seven-figure accounts. Compared to Q1 2024, the number of new millionaires has risen sharply. In Q1, only 512,000 savers had $1 million or more in their retirement accounts, down from 537,000 at the end of 2023.

Michael Shamrell, VP of Workplace Thought Leadership at Fidelity, noted: "Historically, 401(k) millionaires were dominated by Gen X (born 1965–1980) and baby boomers (born 1946–1964). But as millennials progress into mid-to-late career stages, we're seeing them hit this savings milestone—an interesting shift."

Fidelity's data covers 26,000 corporate defined-contribution plans (24.8 million participants), 18.3 million IRAs, and 10,670 tax-exempt 403(b) plans (9.25 million participants).

Millennials now make up 3.7% of 401(k) millionaires, up from 1.8% last year. By generation, the breakdown is roughly: baby boomers at 36% (as they begin withdrawals), Gen X at 60%, and millennials at 4%.

Overall retirement account balances hit record highs: the average 401(k) balance rose 5% to $144,400, while IRAs averaged $137,902. Women’s average balances surpassed $500,000 for the first time ($501,100), up 16.5% YoY—a group consistently contributing for 15+ years.

The total savings rate (employee + employer) reached 14.2%, a record, though Fidelity recommends 15%.

However, challenges remain: nearly 20% of Fidelity participants have outstanding loans (up from 18.7% YoY), and 2.8% took hardship withdrawals (vs. 2.6% in June). Early 401(k) withdrawals typically incur taxes and a 10% penalty unless exempt under IRS rules (e.g., medical expenses, education, or first-time homebuying).

While year-end trends remain uncertain, one thing is clear: millennials are finally gaining entry to the 401(k) millionaire club.