Fidelity says 401 (k) millionaires club is approaching 200,000 for the first time

• Nearly 200,000 401 (k) accounts in the United States have accumulated at least $ 1 million in savings.
• But the average balance of 401 (k) has only increased by 2% in the past year to $ 106,000.
• Alicia Munnell, head of the Boston College Retirement Research Center, said most people had not saved enough for their retirement.

Fidelity Investments, the giant mutual fund company, announced Wednesday that the number of 401 (k) plans that it administers with savings of more than a million dollars had increased by 9%, for to establish at 196,700 in the second quarter. Bad news? These diligent investors represent a small fraction – just 1.1% – of the more than 17.1 million Fidelity 401 (k) accounts.

In addition, the pace at which the Fidelity 401 (k) accounts reached the millionaires mark slowed considerably between April and June, after 35% in the first quarter. Average account size grew even more slowly, at only 2%, to $ 106,000. This is largely due to the stock market, which also grew less rapidly in the second quarter. Most of the 401 (k) assets are invested in equities.

Nevertheless, over the past year, 401 (k) returns have underperformed the market. The S & P 500 gained 8% as at June 30, while the 401 (k) balances increased only 2% over the same period.

In recent years, Fidelity has regularly touted the growth of 401 million millionaire accounts, sometimes even describing the achievement as something much easier to achieve than it really is. What is true is that the average size of accounts may be that the potential retirement crisis in America seems worse than it is. Indeed, many households have multiple retirement accounts, including IRAs and often more than one 401 (k).

In addition, more young people are enrolling in 401 (k) plans, which is a good thing, which reduces average assets. Fidelity indicates that the average balance of a 401 (k) plan that has been open for at least 10 years is $ 305,900.

"Although the number of millionaires 401 (k) still represents a small percentage of our overall 401 (k) platform, it's good to see the number of people with a million dollars or more on their account is increasing steadily, "said Katie Taylor, Fidelity's Vice President, Leadership for Informed Leadership. "Most of these millionaires are baby boomers, have been saving for many years, have paid a good amount and invested in growing their account."

But that is far from the norm. And even Fidelity says the average worker should save 15% of his salary if he wants to be financially prepared for retirement. This is a daunting challenge for someone who earns less than $ 100,000 a year, not to mention $ 50,000.

Alicia Munnell, who runs the Boston College Retirement Research Center, said the latest data suggests that most people have not saved enough for their retirement. "I am concerned that many people will not be able to pay for their standard of living in retirement," she said.