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401(k) and IRA millionaires hit record

Retirement savers are reaping the benefits of the stock market’s record run. 

The number of investors with at least $1 million in their 401(k) accounts rose to an all-time high of 233,000 in the final three months of last year, topping the previous record of 200,000 in the prior three months, according to Fidelity Investments’ quarterly analysis of retirement saving trends for its more than 30 million holders of 401(k) or IRA accounts.

The number of IRA millionaires also rose to a record 208,000 in the period. An IRA, or individual retirement account, is a tax-deferred personal retirement plan sponsored by the government.

The increases reflect some of the stock market’s strong gains at the end of 2019. The Dow Jones Industrial Average rose 6.7%, including dividends, during the fourth quarter, while the Standard & Poor’s 500 index climbed 9.1%.

“Many working Americans rely on 401(k) accounts to fund their retirement,” says Katie Taylor, vice president of thought leadership at Fidelity. “The fact that people across all age groups are saving at higher levels than what we’ve seen in the past is really encouraging.” 

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Piggy bank with a combination lock and nest eggs that say IRA and 401K sitting on top of 20 dollar bills.

Retirement balances

Average account balances also set records.

The average 401(k) account balance reached $112,300 at the end of the fourth quarter, or the last three months of the year. That represented a 7% gain from the previous quarter’s balance of $105,200 and surpassed a record of $106,500 in the third quarter of 2018. 

IRA contributions rise

The percentage of investors contributing to their IRAs rose, led by millennials.

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