401(k) Millionaires Club Hits Record High

You don’t need to visit Hollywood to see a bunch of millionaires. Fidelity Investments says that the number of people with $1 million or more in their 401(k) retirement plan at work has skyrocketed in the past year.

Fidelity says that 133,000 people have achieved millionaire status, a significant jump from the 89,000 savers that became millionaires at the beginning of 2017.

There are a number of factors that have helped savers achieved this milestone.

A roaring stock market does play a major role, but many people also are contributing a lot more to their retirement plan. The average participant is now contributing 8.5%, which Fidelity notes is the highest percentage contribution in 10 years.

In fact, three out of 10 savers increased their contribution amount over the last year. Because of these increased contributions, both men and women are achieving 401(k) millionaire status by their late 50s.

Experts stress that the number of 401(k) millionaires highlights the importance investing in your retirement as early as possible.  To achieve million dollar status in a 401(k) it will take the better part of your career.

Not investing in a 401(k) right away is a common mistake made by many  younger employees. Additionally, Fidelity reports that one out of five savers is not contributing enough to take full advantage of employer matching.

This can be attributed to the fact that many corporations auto-enroll their employees, but do so at a at a lower level that doesn’t meet the matching requirements.  

Getting to $1 million

Jeanne Thompson, a senior vice president of Fidelity Investments, tells wannabe millionaires to increase their contribution amount by 1% every year.

It’s critical, too, for young investors to not be too conservative in choosing their investments, Thompson says. Having a portfolio that features more high-risk stocks and less low-risk bonds is the key to maximizing your gains when you’re young, she says.

Getting to $1 million dollars worth savings is desirable, but it still might not meet all of your retirement demands.

Other mitigating factors such as debt level, life expectancy, family dynamic and spending level need to be taken into consideration when budgeting for retirement.

Thompson notes that most of us should strive to have at least 10 times our yearly income by retirement age. On that basis, a $1 million 401(k) would be adequate savings for someone making $100,000 a year.

5 Best Stocks to Buy If Biden Wins the Election

If Vice President Joe Biden wins the election on November 3, 2020, you might want to consider adding these five equities positions to your portfolio: XLU, TSLA, XLV, MLM, and

TGIF — Ending the Week with a Whimper

Everything is proceeding as I have foreseen. In Monday's "The Week Ahead — 200,000 Deaths Weigh Heavily on the Market," we knew the 200,000th American death would put Covid back

Even If the Overall Market Continues Lower, This Staple Could Maintain Its Upward Trend

Since peaking in early September, the main indices have all three stumbled for the last few weeks with the S&P and Nasdaq falling over 10% from their highs already. Three

tesla stock

TSLA Too Volatile? Two Option Strategies for Tesla Stock

Tesla Inc. (TSLA) is one of the most popular stocks amongst investors. Led by CEO Elon Musk the electric vehicle manufacturer has disrupted the transportation industry, bringing hype to a

pot stock

Pot Stock ‘Blood in the Streets’ Buy Signal Is Here

The cannabis market has been a volatile space in recent years. A wave in legalization, particularly in Canada but also through parts of the United States, led to significant growth

Use Options as Portfolio Insurance in Rocky Times

Since the beginning of September we have seen the main U.S. indices drop. There are a number of possible reasons for the decline, but more importantly I expect the increased

4 Foreign Countries Where You Can Retire On Social Security Alone

Someone once said that retirement is not the end of the road but a highway opening to a new chapter in life. Whoever said that clearly has never experienced a

We’re Beating the Index Off the March Low: Update

The Bulletproof Wealth Report model portfolio is continuing to perform well and is now up 27.4% since the inception of our monthly newsletter on April 13, 2018. Although the value

Terrible Tuesday: Fed’s Powell Says U.S. Faces Slow, Uncertain Recovery

Powell testifies before Congress today. We already know what he's going to say though, as his testimony is pre-released. Not that that will stop the market from acting shocked when

5 Best Online Banks, Highest Savings Rates for Your Buck

Finding an online bank can be difficult. Varying rates, hidden fees and simply having too many choices can cause confusion and make it hard to get started. Set aside some

Hiring a Financial Advisor: What Is a Fiduciary, and Why Should You Care?

“Fiduciary” is a funny word. You may have never heard of it until now, but you may actually have had a fiduciary in your life. More importantly, you may wish

Trading Cryptocurrency Using Limit and Stop Orders

This is the last of a five-part series to help new investors and traders start and grow a cryptocurrency account. In all five articles I’ve been using Bitcoin (BTC) in