Fidelity 401K millionaires

[deserat]

Article here : https://www.usatoday.com/story/mone...01-k-millionaires-hits-new-record/1000228002/

So, even with this market the way it is, only 1% have that balance at Fidelity - I would say Vanguard probably has a similar amount ( I went to their account holder meeting in Scottsdale last year and a very 'Hollywood-ish' man got up and asked how many VG users had at least a million in VG accounts - the Board said less than 5%).

Interesting. If you look at the population of the US ~350M and are generous with retirement account millionaires, it's probably only 1-2% with that amount.....wow.

 

[GrayHare]

An important distinction: this is number of accounts with $1+ million, not number of people. You can tell by the quote "An additional 7,667 Fidelity IRA customers clocked in with $1 million-plus account balances in the April-thru-June quarter...".

The number of people with $1+ million is higher than stated in this report because some people have a total of $1+ million divided across multiple 401k accounts, each of smaller value. Exactly how many more people this includes is unknown.

 

[deserat]

An important distinction: this is number of accounts with $1+ million, not number of people. You can tell by the quote "An additional 7,667 Fidelity IRA customers clocked in with $1 million-plus account balances in the April-thru-June quarter...".

The number of people with $1+ million is higher than stated in this report because some people have a total of $1+ million divided across multiple 401k accounts, each of smaller value. Exactly how many more people this includes is unknown.

You are correct. My point was more general in that I expected much more than less than 10% of population or so having at least that in retirement accounts. I was sort of like that Hollywoodish guy in that I thought that many more were in that position.

It's similar to the thread about credit cards - I pay mine off every month and yet most in the population do not. My paradigm is a very different one.

Also, my fear is that those who are the ants will be overtaken by the grasshoppers, so the more ants there are, the better the deterrent.

Lastly, it would be interesting to know that number of people with at least $1M or more in their retirement accounts.....

 

[LOL!]

I think it's a totally stupid article for many reasons.

1 Many people have multiple accounts and even multiple 401(k)s and maybe never get a million in a single account.

2. 401(k) plans have not been around that long. You can do the math yourself: If one was contributing the maximum allowed annually to a 401(k), how long would it have taken to get to $1,000,000? Don't forget that the maximum allowed was only a few thousand dollars back in the 1980s.

3. Do the math requested in question #2 for with and without various amounts of company match and for various asset allocations such as 100/0, 80/20, 60/40, 40/60, 20/80.

4. How many people stopped contributing because they decided to retire because they had enough and rolled over to an IRA?


The associated video says they "started young", but the other way to say that is "they got old" as the video said an age the client was about 60 years old for these 7-figure accounts.

The only take-away I would have is that people investing for a long time probably can get to a 7-figure portfolio. There are similar articles for TSP millionaires.

 

[Olbidness]

There was an article similar to this one years ago. That article went into a little more detail, in that there were 12 million people with 401K accounts with Fidelity. That article also detailed how many of that number made less than 150K a year. I don't remember the exact number but it was less than 10 percent of the total number of millionaires. The person that makes 150K and has saved a million is different than someone who makes 1 million a year and has 1 million in their 401K.

 

[RunningBum]

I don't have that much in my tIRA+Roth. 401K all rolled over into those accounts.

Asking how much I have in my VG (or Fidelity) accounts (not specifying retirement type) is a different question from what the article is about.

 

[MRG]

Interesting trivia. Of course there's other numbers. I'm not sure about Fidelity's internal data structures but many, many fund companies can see you as a household.[emoji12] Obviously that goes away across fund families.

If folks are interested the ICI produces reports on fund metrics. Much of that data is available for free.

 

[LOL!]

The person that makes 150K and has saved a million is different than someone who makes 1 million a year and has 1 million in their 401K.

Sure they are different, but the $150K a year person could surely have contributed the maximum allowed annually to a 401(k) their entire working career ... even back when they were only making $40K in the early 1980s.

 

[Big_Hitter]

The person that makes 150K and has saved a million is different than someone who makes 1 million a year and has 1 million in their 401K.

not really - both are limited by the same amount they can contribute to the plan each year

 

[deserat]

I think it's a totally stupid article for many reasons.

1 Many people have multiple accounts and even multiple 401(k)s and maybe never get a million in a single account.

2. 401(k) plans have not been around that long. You can do the math yourself: If one was contributing the maximum allowed annually to a 401(k), how long would it have taken to get to $1,000,000? Don't forget that the maximum allowed was only a few thousand dollars back in the 1980s.

3. Do the math requested in question #2 for with and without various amounts of company match and for various asset allocations such as 100/0, 80/20, 60/40, 40/60, 20/80.

4. How many people stopped contributing because they decided to retire because they had enough and rolled over to an IRA?


The associated video says they "started young", but the other way to say that is "they got old" as the video said an age the client was about 60 years old for these 7-figure accounts.

The only take-away I would have is that people investing for a long time probably can get to a 7-figure portfolio. There are similar articles for TSP millionaires.

You are correct with regard to IRA rollovers, etc. I don't know that I would call it a 'stupid' article, but YMMV. As for the article writer, I bet they lumped a bunch of things in there they don't even understand (IRA versus 401K versus 403b versus 401a versus Roth).

I guess I was too obtuse with regard to why I thought this interesting. I am interested in some numbers with regard to how many people have saved enough for their retirement. Yes, I know retirement quality is in the eye of the beholder, however, the $1M mark is for right now a good enough rough number to use for counting purposes.

Thanks to the poster who mentioned ICI.

The anecdote about the VG board responses (both the vocal response and the facial expressions of the other board members) leads me to believe that the percentage is not high compared to the VG or the regular population.

 

[deserat]

Interesting trivia. Of course there's other numbers. I'm not sure about Fidelity's internal data structures but many, many fund companies can see you as a household.[emoji12] Obviously that goes away across fund families.

If folks are interested the ICI produces reports on fund metrics. Much of that data is available for free.

Is the Investment Company Institute what you mean? Website : https://www.ici.org

Took awhile to find that as ICI is a fairly common acronym

Edited to add: https://www.ici.org/research/investors

 

[MRG]

Is the Investment Company Institute what you mean? Website : https://www.ici.org

Took awhile to find that as ICI is a fairly common acronym

Yes the ICI produces metrics about the industry. Sorry I should have left the full name.

 

[deserat]

Yes the ICI produces metrics about the industry. Sorry I should have left the full name.

No worries - I'm glad you posted as it gave me an opportunity to learn something and then offer the link to the forum. Thanks!

 

[Olbidness]

not really - both are limited by the same amount they can contribute to the plan each year

Agreed, but the level of sacrifice to reach that million is different. Reaching the million dollar account balance requires more discipline the more modest the income.

 

[RobbieB]

I've had many 401K plans, one each at all the companies that offered them. But I have zero now, all rolled into 1 IRA.

While I was working I never had a million in any 401K.

 

[Big_Hitter]

Agreed, but the level of sacrifice to reach that million is different. Reaching the million dollar account balance requires more discipline the more modest the income.

possibly - maybe the person making $1M a year works 70 hours a week and has 3 families to support

 

[Car-Guy]

Reading this thread reminds me that a million just "ain't " what is was. Heck I've got over a mil in an IRA and another in a 401k at two different financial institutions and they barely know my name. Matter of fact, I don't even have an account manager at one of the firms. (Don't really need or want one, but I'm just saying....)

 

[Car-Guy]

2. 401(k) plans have not been around that long. You can do the math yourself: If one was contributing the maximum allowed annually to a 401(k), how long would it have taken to get to $1,000,000? Don't forget that the maximum allowed was only a few thousand dollars back in the 1980s.

Well they have been around long enough for "my generation" to accumulate over a mil. I started contributing to my Mega Crops 401k in the mid 80s'. I always contributed the max to get the full "matching" amount and in later years, I contributed the max allowable by law. By the time I retired some ~8 years ago, I had accumulated well over a mil in that account. Maybe it depends somewhat on how you invest the money you have in a 401k too!


Anyway, I don't intend to touch it until RMD's force me.

 

[Dash man]

DW has well over $1M in her Fidelity 401k. A good chunk was from a lump sum pension rolled into it, but by now she would have reached it anyway. But most of our wealth is in after tax accounts and real estate.

 

[Andre1969]

I think I've read that something like 8-10% of households have a net worth of at least $1M. So that would be before-tax accounts, after-tax accounts, and home equity. I would imagine that very few people actually have $1M in any one 401k account. You would have to have been working with one company for a really long time, and contributed a pretty generous amount each year, and seen some pretty good returns.

I have about $131K with Fidelity, spread out in three accounts. One of them is a rollover from an old IRA, and two are inherited IRAs. So to them, I'm probably just a little spittle in the cesspool of life. But, my total investible assets is around $1.9M, and throw in home equity I'm over $2M. So, I have a feeling that the population in general is doing better, financially, than some of these studies and reports might seem to suggest.

 

[Big_Hitter]

You would have to have been working with one company for a really long time, and contributed a pretty generous amount each year, and seen some pretty good returns.

that's not true - you could have several jobs and keep rolling the k money into the new employer's k plan, ad nauseum

 

[FIREd_2015]

Here's some data from a Government Accounting Office report on IRA balances as of 2011:

- The unit of analysis was the taxpaying unit, and a tax return, such as a married couple filing jointly, may include more than one IRA owner. Aggregate balances include inherited IRAs that are not readily identified in the IRS data.

- For tax year 2011 (the most recent year available), an estimated 43 million taxpayers had individual retirement accounts (IRA) with total reported fair market value of $5.2 trillion

- About 42.4 million (99 percent) of those taxpayers had aggregate IRA balances of $1 million or less, with a median accumulated IRA balance around $34,000

- Around 600,000 taxpayers had aggregate IRA balances exceeding $1 million, with a median of around $1.4 million

http://www.gao.gov/assets/670/665806.pdf


Given that the S&P 500 has doubled since 2011, I'm guessing the number of taxpayers today with IRA balances exceeding $1 million has probably doubled. This report also doesn't include 401k/403b balances so I'm guessing the total number of taxpayers with retirement accounts exceeding $1 million is somewhere between 1 and 3 million.

 

[Perryinva]

There are 126M housholds in the US even using 3M is still less than 3% and 1.2M with a Mil, only puts it at 1%. Sounds too low to me, too.

 

[audreyh1]

Kinda read like publicity for Fidelity.

 

[marko]

There was an article similar to this one years ago. That article went into a little more detail, in that there were 12 million people with 401K accounts with Fidelity. That article also detailed how many of that number made less than 150K a year. I don't remember the exact number but it was less than 10 percent of the total number of millionaires. The person that makes 150K and has saved a million is different than someone who makes 1 million a year and has 1 million in their 401K.

Reminds me a bit of the article that once said that most millionaires drive Toyotas .

That may be true, but it had the implication that the guy driving the Bentley isn't really a millionaire, which again may be true because he's a multi-multi millionaire.

Lots of ways to use data. I suppose one could twist the above article around and say that Fidelity does a lousy job of making millionaires out of small investors.