You know I want you to save until it hurts. Now, Fidelity says Americans’ 401(k) balances are higher than ever before. Yes, some of that has to do with record-high stock prices, but the other component is that Americans are increasing the amount of saving they’re doing.
In the second quarter alone nearly 12% of Americans increased their contributions to retirement accounts. Despite inflation, and the urge to go on a COVID shopping spree for pets, exercise equipment, cars, homes, and outdoor sporting goods, Americans are making the decision to put more money away for a future they know is risky.
Jessica Dickler reports for CNBC:
Despite Covid case numbers rising in the U.S. and around the world, the year’s market highs have been a boon for savers. In the second quarter, the S&P 500 ended up 8.2%, before retreating more recently.
Nearly 12% of workers increased their contributions during this time, while a record 37% of employers also automatically enrolled new workers in their 401(k) plans.
As a result, the number of 401(k) and IRA millionaires hit fresh highs, as well.
The number of Fidelity 401(k) plans with a balance of $1 million or more jumped to a record 412,000 in the second quarter of 2021. The number of IRA millionaires increased to 342,000, also an all-time high.
Together, the total number of retirement millionaires has nearly doubled from one year ago.
Action Line: If you’re not already, begin saving until it hurts. You’ll be happier in the future when you really need that money. If you need help, I would love to talk with you.
E.J. Smith - Your Survival Guy
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