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Becoming the millionaire next door

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Becoming the 401(k) millionaire next door

Who wants to be a 401(k) millionaire?  

According to Empower Personal DashboardTM data as of March 2024, 9.1% fall into that category, having accumulated at least $1 million in retirement savings in employer-sponsored plan and individually controlled IRA savings and investment accounts. And the number is significantly higher among millionaires overall: Dashboard data shows 21.6% have an average net worth of at least $1 million — and of that group, 42.2% qualify as retirement millionaires.

The amount of retirement millionaires continues to grow, too: As of March 2024, the number of 401(k) accounts with balances of at least $1 million rose to 885,138, up nearly 12%, from year-end 2023, and nearly 30% year over year. The average account balance for this group was $1,137,409 as of March 2024.

There were 2,070,036 total retirement accounts (including employer-sponsored plan and individually controlled IRA savings and investment accounts) with balances of at least $1 million as of March 2024, a nearly 11% increase from year-end 2023, and over 27% year over year. The average account balance for retirement millionaires was $2,277,205 as of March 2024.

Change in average balances – accounts with at least $1 million

March 2023 March 2024 Year/year change
Average 401(k) balances $1,086,642 $1,137,409 + 4.7%
Average retirement balances $2,183,404 $2,277,205 + 4.3%

*Anonymized user data from the Empower Personal Dashboard™ as of March 2024 and 2023.

The average retirement balance was at least $1 million for 194,943 investors as of March 2024, a 16.7% increase compared with 167,028 investors in March 2023. Average retirement balances overall increased 11.7% to $462,572 for the same period, year over year.

Change in average balances overall

March 2023  March 2024 Year/year change
Average 401(k) balances $257,587 $287,056 + 11.4%
Average retirement balances $414,020 $462,572 + 11.7%

*Anonymized user data from the Empower Personal Dashboard™ as of March 2024 and 2023.

There’s a considerable chunk of people with savings hovering around the million-dollar milestone too: Dashboard data shows average retirement balances for people in their 50s reaches $923,832.

Average balances by age

by decade 
Average retirement
March 2024 
Average retirement
March 2023 
Average 401(k)
March 2024 
Average 401(k)
March 2023 
20s $92,912 $73,633 $77,139 $61,346
30s $222,072 $193,483 $167,015 $145,673
40s $510,477 $467,068 $355,260 $325,555
50s $923,832 $846,798 $571,198 $530,497
60s $1,155,627 $1,084,293 $563,863 $530,433
70s $1,044,666 $1,026,029 $419,835 $447,100
80s $802,197 $756,217 $392,686 $376,341
90s $540,133 $521,090 $345,416 $321,033

*Anonymized user data from the Empower Personal Dashboard™ as of March 2024.

Still, these big savers are both spenders and carry debt, too. Among individuals with an average net worth of $1 – $5 million, average credit card balances fall in at around $57,000 for the 12-month period ending March 2024, according to the Empower data. The biggest expenditures for that same group include roughly $2,730 on mortgages, $1,265 on travel, $950 on general merchandise, $859 on restaurants, $639 on groceries, and $600 on clothing, monthly on average for the same period.

So, what does it take to achieve this retirement millionaire milestone? A look at the numbers — and behaviors — could offer some valuable insights:

Getting an early start

Hitting the million-dollar threshold takes time and dashboard data shows people are prioritizing saving for retirement by starting early and saving continuously. The average retirement balance for people in their 20s is $92,912 — and that represents more than 90% of their average overall net worth.

Not surprisingly, average overall retirement balances — and workplace savings amounts in particular — increase steadily over time as earning potential rises, and up until they hit average retirement age when people start leaving the workforce and earnings years wind down. Dashboard data shows the average 401(k) balance of $571,198 for people in their 50s levels off and starts to dip to $563,863 when they reach their 60s.

While “consistently” and “as much as possible” may be good rules of thumb for saving, keep in mind there are contribution limits for 401(k)s: Up to $23,000 in 2024 — and an additional $7,000 for those age 50 or older.

Taking advantage of matching contributions

Employers may offer a 401(k) matching program, where they match a portion of an employee’s contribution. The average 401(k) employer match was $4,600 in 2023,1 which can have a powerful compounded effect over time — especially considering the opportunity to invest the funds for more potential growth.

It’s critical, though, to pay attention to the required contribution amounts to get the full match. Empower research shows that saving for retirement is the top goal for working Americans, yet 25% of workplace savers aren’t contributing enough to maximize their employer match, essentially leaving money on the table.

Diversifying across asset classes

Investing behaviors and the ability to grow wealth over time are also important functions of working to attain the retirement millionaire distinction. According to dashboard data, retirement savings increase by 139% in the decade from 20s – 30s, but balances are also at their lowest in those earliest years of earning and saving. The decade from their 40s to their 50s represents another significant growth span: Average balances rise nearly 81% during this period, almost reaching the $1 million milestone.

What do these investment portfolios have in common? According to dashboard data, people with an average overall net worth of more than $1 million tend to invest in a mix across the main asset classes. This broad diversification approach can be key to understanding the value of not keeping all your eggs in one basket.2

Asset allocation for dashboard users with average net worth balances >$1 million

Age by decade  Cash  U.S. stocks  U.S. bonds  Int’l stocks  Int’l bonds  Alter-
20s 23.2% 47.5% 2.8% 8.1% 0.4% 5.2% 12.8%
30s 20.0% 47.1% 3.6% 9.3% 0.6% 4.3% 15.1%
40s 18.4% 45.9% 5.1% 9.5% 0.9% 3.8% 16.4%
50s 18.0% 44.5% 8.2% 9.3% 1.4% 3.8% 14.9%
60s 19.6% 41.7% 12.1% 8.9% 2.1% 4.0% 11.7%
70s 23.5% 40.1% 12.5% 7.8% 2.1% 4.1% 9.9%
80s 27.7% 40.8% 11.7% 6.4% 1.8% 3.3% 8.4%

FOR ILLUSTRATIVE PURPOSES ONLY: *Anonymized user data from the Empower Personal Dashboard™ as of March 2024. User experiences may vary. This is not investment advice.

According to dashboard data, individuals in their 20s in this segment are most heavily weighted in U.S. stocks (47.5%) and cash (23.2%). Cash holdings shrink gradually over time, with individuals in their 50s having the lowest cash balances (18.0%), suggesting a less conservative investing approach during peak earning years, especially given the trend starts to reverse as people enter their 60s. The portfolio mix is notably similar for individuals in their 40s and 50s.

The big picture

The road to becoming a retirement millionaire can be a long one. Using online tools like the Empower Retirement Planner can help with setting retirement goals and developing strategies that align with these objectives along the way in order to maximize retirement savings.

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