Do you think saving for retirement is just too tough? Think again. The number of people with 401(k) balances of at least $1 million hit a record 150,000 at the end of 2017 in plans run by Fidelity Investments. Likewise, the number of Fidelity-run IRAs with retirement savings balances of $1 million or more hit a record 152,000.
And if $1 million seems out of reach for you — at least for now — don’t worry, because those million-dollar balances were part of a broader pattern of retirement savings balances overall growing to record highs.
Your retirement savings balances can join in on the fun — if you take six steps designed to maximize growth in retirement accounts, recommended by Meghan Murphy, a Fidelity 401(k) expert.
- Start early.
- Invest the yearly maximum.
- Invest smartly. If you can’t afford the maximum, at least aim for a contribution amount that will trigger the largest company match offered.
- Invest for growth.
- Stick to your plan. Do that by rebalancing periodically.
- Use target date funds. That’s especially important if you can’t make appropriate investment decisions for yourself or don’t want to try.
How Retirement Savings Grew
The record balances in Fidelity-run retirement accounts were reached as of the end of 2017 — shortly before the market’s recent volatility. While overall market direction can dampen your retirement accounts’ growth, once the market turns up again — and it always does — you want your accounts to be poised to benefit.
The 150,000 $1 million or more 401(k) balances were up from 93,000 just one year earlier. The number of $1 million IRA balances rose to 152,000 from only 109,000 a year earlier, at the end of 2016.
Overall average balances in Fidelity-run 401(k) accounts and IRAs were also up. By the end of the fourth quarter, 401(k) and IRA balances hit record highs as of Dec. 31 of $104,300 and $106,000, respectively. That put the average 401(k) balance above the $100,000 threshold for the first time, joining IRA balances in six-figure territory.
The rising stock market in 2017 helped accounts to grow.