401(k) Millionaires Surge to Record Highs, Driven by Steady Savings and Market Gains
Despite market volatility, the number of 401(k) millionaires continues to climb, reaching new peaks at the end of 2025. This growth is fueled by consistent contributions from both employees and employers, coupled with positive market performance.
Record-Breaking 401(k) Balances
According to Fidelity Investments, the average 401(k) balance rose by 11% in 2025, reaching $146,100. More significantly, the number of individuals with $1 million or more in their 401(k) accounts hit a record high of 665,000 at the end of December. This represents a substantial increase from the 512,000 savers who had reached the million-dollar milestone in the first quarter of the year.
Consistent Savings Habits Prevail
Michael Shamrell, Vice President of Workplace Thought Leadership at Fidelity Investments, emphasized the importance of a long-term approach to retirement savings. “An important part of any successful retirement strategy is taking a long-term approach to retirement savings and not making changes based on short-term events,” Yahoo Finance reported.
Savers demonstrated resilience throughout 2025, maintaining consistent contribution rates. The average savings rate remained at 14.2%, consistent with 2024 levels. This is comprised of an average employee contribution of 9.5% of gross income and an average employer match of 4.7%.
Nearly 40% of workers increased their 401(k) contribution rate during 2025, while only 10.6% reduced it. IRA contributions as well saw a significant boost, increasing by 25% from the prior year, with total contributions up 23% – marking a record high for IRA contributions made between the end of September and year-end.
Gen X Leads the Way, Millennials Catching Up
Gen X continues to represent the largest segment of 401(k) millionaires, accounting for 60.3% of the total. Boomers create up 34.6%, while Millennials represent a growing 4.1%. However, Millennials are increasingly reaching the million-dollar milestone as they progress in their careers.
Notably, Gen X savers demonstrated the highest savings rate, exceeding 15%, compared to 13.5% for Millennials and 11.3% for Gen Z. Shamrell noted that Gen X is acutely aware of their approaching retirement and are at peak earning potential, allowing for increased contributions, including catch-up contributions where applicable.
Generational Investment Trends
Millennials and Gen Z are increasingly utilizing Roth 401(k)s, while Gen Z continues to favor target date funds. More than 13% of Gen Z participants in their 20s increased their contribution rate from the end of September to the end of December.
The Power of Target Date Funds and Diversification
A significant 63% of Fidelity savers have allocated all their 401(k) savings to target date funds, which automatically adjust asset allocation based on the investor’s projected retirement date. Less than 7% of savers maintain a 100% equity allocation, highlighting the importance of diversification with fixed-income investments to mitigate risk during market fluctuations.
Looking Ahead
The continued growth in 401(k) millionaires underscores the benefits of consistent saving and long-term investing. As market conditions evolve, maintaining a diversified portfolio and a disciplined savings strategy will remain crucial for achieving retirement security.