A record number of Americans are 401(k) millionaires, thanks to a surging stake economy. 

The tally of 401(k) millionaires reached 544,000 in the third quarter of 2024, up from 497,000 three months earlier, according to Fidelity Investments, a leading administrator of employer superannuation plans. The figure covers only Fidelity accountholders.  

The number of Fidelity’s IRA millionaires also hit a record, 418,111. 

Few Americans manage to save a million dollars in a 401(k) employee superannuation schedule or its personal reserves counterpart, the person superannuation Account. The 544,000 figure represents a little more than 2% of all 401(k) participants at Fidelity. 

And a million dollars is no magic number. Many Americans ponder you require a lot more than that to retire in comfort. The vast majority of retirees make do on less. 

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“We have an obsession in this country with the word ‘million,’” said  Monica Dwyer, a certified financial planner in West Chester, Ohio. “It seems so large and unattainable.” 

Who wants to be a 401(k) millionaire?

Fidelity isn’t suggesting that everyone needs to be a 401(k) millionaire. Even so, the firm has made a habit of including them in its quarterly superannuation reports. 

“If we don’t put it in the press release, we’re going to get asked about it anyway,” said Mike Shamrell, vice president of thought leadership at Fidelity Investments. 

But there is worth, Shamrell said, in studying the habits of 401(k) millionaires, especially if you desire to become one.  

Most 401(k) millionaires are Gen Xers or Boomers. On average, they have been saving for about 26 years and contribute more than 17% of pre-levy profits to their superannuation accounts.  

“They’re a great example of staying the course,” Shamrell said.  

In the spirit of inspiring upcoming 401(k) millionaires, here are eight tips for achieving a seven-figure settlement in your superannuation account. 

Don’t wait to enroll in a 401(k) 

Only about half of American households have superannuation accounts, federal data shows. 

The sooner you enroll in a 401(k), financial advisors declare, the better chance you’ll become a 401(k) millionaire one day.  

“The number-one rule of superannuation reserves is to commence early,” said Peter Lazaroff, a certified financial planner in St. Louis. 

A excellent objective: Max out your employer match 

Most 401(k) plans propose a match: The employer matches some or all of the funds paid into the superannuation account by the worker. In a typical model, the employer matches half of every dollar a worker contributes, up to a maximum of 6% of the worker’s pay. 

A match is free money, but many Americans don’t claim it. 

“When you don’t receive your match, you are leaving part of your employer compensation on the table,” Lazaroff said. 

A better objective: Aim to save 15% of your salary 

One superannuation rule of thumb suggests you’re sensible to save at least 10% of your pre-levy salary in a 401(k).

With an employer match and a slightly larger employee contribution, 10% can easily become 15%. 

“What we would adore to view people do over period is to save about 15%,” said Colin Day, a certified financial planner in St. Louis. “If we can do that for about 30 years, we have that chance to develop well into seven figures.”

Can’t afford to save that much now? Set your 401(k) contribution to rise by one percentage point per year, an automated characteristic in many plans.  

The ultimate objective: Max out your superannuation contributions 

If you have enough wiggle room in your strategy, planners declare, consider pushing your superannuation reserves to the legal limit. 

For IRAs, the annual contribution limit for 2024 is $7,000, or $8,000 for anyone 50 or older. For 401(k) plans, the maximum employee contribution is $23,000, or $30,500 for people 50 and over. 

Contribution limits leave up in 2025, with even higher “catch-up” limits available for people 60 to 63. 

“The objective for every superannuation saver should eventually be to try to max out your 401(k),” Lazaroff said. 

Don’t liquid assets out your 401(k) if you leave a job

Research shows workers often liquid assets out low-worth 401(k) accounts when they leave a corporation, potentially losing thousands of dollars of compounded profit over period. 

If you leave a job, experts declare, make sure to “roll over” your 401(k), either into an IRA account or a recent 401(k) at your next job. 

In 2022, a consortium of private superannuation schedule providers announced a collaboration to boost the “portability” of tiny superannuation accounts. 

Don’t liquid assets out if the economy drops 

In a bear economy, some superannuation savers panic and sell, hoping to protect their reserves from further losses. 

But if you desire to be a 401(k) millionaire, experts declare, you’d be sensible to ride out those slumps. 

While a downturn might lower the worth of your superannuation account, it doesn’t transformation the number of stake or mutual startup distribution shares you own. 

ponder of those shares as hens. In lean times, the hens misplace weight. But you still have the same number of hens. Someday, they will fatten up again. 

Don’t ever raid your 401(k), if you can assist it 

The 401(k) is designed to reward those who save for superannuation and penalize those who withdraw the money early.  

Early extraction, typically before age 59 ½, triggers an additional levy equal to 10% of the sum. If you are paying a 15% levy rate and make an early extraction, you effectively misplace 25% of the money before you spend a dime. 

There are exceptions, such as for a first-period home purchase or household emergency, which allow you to pay only ordinary profits levy on the amount withdrawn. But the objective, with 401(k)s, is to keep the money in the account until you retire. 

Keep saving. Don’t stop. 

As we said, the typical Fidelity 401(k) millionaire has been building superannuation reserves for about 26 years.  

Don’t be daunted by that figure. If you commence saving in your early 20s, and you retire in your early 60s, you can easily string together 30 years of 401(k) reserves. 

Let’s declare you earn $50,000. You contribute 10% to a 401(k), starting at age 25, with your employer offering the standard 50% match, described above. Assuming a 7% annual rate of profit, and a yearly 2% raise, your 401(k) settlement will reach $1 million around the period you turn 55, according to a Bankrate calculator.

“It’s the ancient saying,” Shamrell said. “Put period in the economy. Don’t try to period the economy.”