Sturdy stock market mints a record number of 401(k) millionaires

The number of 401(k) accounts with balances of at least $1 million managed by Fidelity Investments reached a record 769,000 in the second quarter, marking a 19% increase from the previous quarter. This surge is attributed to a strong stock market performance and record average employee contributions. Fidelity Investments reported that about 3% of its 25.8 million 401(k) accounts have balances reaching $1 million.

While these millionaire accounts are becoming more common, they still represent a small portion of the total workforce. Only 7 in 10 workers believe they will be able to retire comfortably, according to a recent survey. Fidelity's Michael Shamrell, vice president of thought leadership, noted that the focus should be on the behaviors of top savers rather than the $1 million milestone, as retirement needs vary greatly from person to person.

The average contribution rate to 401(k)s remained at a record high of 9.6% in the second quarter despite economic pressures. The S&P 500 gained 15% in the second quarter, with broad-based gains of 20% over the past year and 71% over five years due to strong corporate profits and demand for artificial intelligence. However, despite these positive market trends, many Americans remain uncertain about their retirement prospects, with 72% of workers reporting they are falling behind on their savings.