The 401(k) millionaire club has shrunk by a third.
Fidelity Investments had just 299,000 seven-figure workplace retirement accounts at the end of 2022, down from 442,000 a year prior, according to data from the asset manager.
The decline in million-dollar-plus savings came as the average 401(k) lost 20% of its value last year, hit by the slump in bonds and mega-cap tech stocks. The outlook isn’t much better for 2023, as investors continue to battle big headwinds from persistent inflation and continued economic uncertainty. Investors including Rob Arnott, co-founder of Research Affiliates, warn that the US stock market “crash is far from finished.”
Investors may have multiple 401(k)s at Fidelity so it isn’t clear exactly how many individuals are represented in the diminished pool of accounts with at least $1 million. Most accounts are far, far smaller, with the average 401(k) account at Fidelity standing at $103,900 in 2022’s fourth quarter.
While many savers would be happy to have even that amount, one group of investors thinks far more is needed to achieve a comfortable retirement — the 553 people surveyed in Bloomberg’s latest MLIV Pulse survey said they’d need between $3 million and $5 million.
This article was provided by Bloomberg News.