The Rise of 401(k) Millionaires and Keys to Success

Daniel Thornton September 9th, 2024

A successful retirement strategy requires commitment, focus, and a willingness to make some sacrifices along the way — an approach that more and more investors have embraced in recent years.

In fact, recent data from Fidelity Investments shows that nearly 500,000 retirement savers are now 401(k) millionaires. What’s equally encouraging is that among the roughly 48 million Fidelity accounts, the average 401(k) balance stood at $127,100 as of Q2 2024.1

What Are the Keys to Success?

Fidelity surveyed 1,000 these individuals to find out what has made their strategies so successful and found that many of their answers coincided with the core principles we strive to instill in our clients as fiduciaries.2

When we develop a client’s portfolio strategy, we consider all of their assets, including company-sponsored retirement plans. It’s important to note that your retirement strategy may evolve over time to adapt to changes in your finances, lifestyle, or long-term goals. If your situation has recently changed, speak with your financial advisor so that they can assist you in making any necessary adjustments and ensure you are taking advantage of the strategies that are available to you.

In most circumstances, once you reach age 73, you must begin taking required minimum distributions (RMDs) from your 401(k) or other defined contribution plan. Withdrawals from these accounts will be taxed as ordinary income and, if taken before age 59½, may be subject to an additional 10% federal income tax penalty, so be sure to account for this in your tax planning strategy as you identify your income sources in retirement.

Consult with a Professional

The recent rise in 401(k) millionaires underscores the importance of strategic planning, disciplined saving, and informed financial decision-making as essential elements of a successful retirement planning strategy.

As the investment landscape continues to evolve, it’s important to remain proactive regarding your financial approach. Consulting with a financial or tax professional can allow you to customize your strategy to better align with your unique goals and adapt to life’s changes, ensuring you stay on track towards achieving a secure and fulfilling retirement.

1InvestmentNews.com, August 28, 2024. “401(k) millionaires reach another record in Q2, says Fidelity”

2Fidelity Investments, 2024. “Five habits of 401(k) millionaires”

Read More By Daniel Thornton

Disclosures: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Concord Wealth Partners, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Concord Wealth Partners. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Concord Wealth Partners is neither a law firm, nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of Concord Wealth Partners’ current written disclosure Brochure discussing our advisory services and fees is available upon request or on our website. Please Note: If you are a Concord Wealth Partners client, please remember to contact Concord Wealth Partners, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, and/or revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Concord Wealth Partners shall continue to rely on the accuracy of information that you have provided. Please Note: If you are a Concord Wealth Partners client, please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

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